Gold price remains in downtrend. According to our elliott wave analysis, there is increased chance of an upward bounce towards $1,340-50. However, we have no strong buy signal yet. The trend remains down and the strength and form of the decline implies that even if the price bounces towards $1,340-50, we should expect more downside pressures. Gold price has fallen in an impulsive pattern. Since $1,375 we have been pointing out that a large degree correction could be heading towards $1,300-1280. I believed that a bounce could have come earlier but bears have a lot of strength currently.
Gold price needs to break clearly out of the downward sloping red trend line. Resistance is found at $1,320 and then at $1,335. Ichimoku cloud is now above price and this confirms that trend is down. We expect that the Ichimoku cloud could be back tested near $1,340-50.
Gold longer-term support is at the Ichimoku cloud as can be seen in the daily chart above. The support price level is $1,260-80. I do not expect Gold price to break below this area now. I believe that a bounce towards $1,340 will come before breaking this support level. Concluding, trend remains down. We look to sell near $1,340-50.
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