Volatility has finally risen in Gold prices, and we finally saw a break out we were expecting to come. The tight price range of the triangle was preparing us for such a break out. Gold price has broken the $1,287 lower boundaries and is now testing support at $1,280.
Gold price in the 4-hour chart as shown above is below the Ichimoku cloud and price is making now lower lows and lower highs. Gold price is trending lower and should now break below support of $1,280 and $1,270. This will push price much lower towards $1,240-$1,220. Short-term resistance is found at $1,295 and at $1,305. A reversal above $1,305 will signal a fake break down and the new bullish target will be $1,330.
However, our most probable outcome will be a decline lower towards the 76.4% Fibonacci retracement in the area below and around $1,240. If we are in a bigger triangle pattern, we should expect prices to bounce from that area towards $1,300-$1,340. The longer-term view we have for Gold price remains bearish targeting near $1,000.
The material has been provided by InstaForex Company - www.instaforex.com
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