Gold has paused its rise at the 38% retracement and reversed short-term trend by breaking below the upward sloping trend line. The upward bounce from $1,180 is most probably over and a new downward move has started with target below $1,180. Longer-term trend remains bearish and so do we expect gold to fall towards $1,000.
Red line= trend line
Blue line= support
The red trendline support is now broken and gold price has given the first sell signal since October 1st. Gold price has reached the 38% retracement of the $1,322-$1,183 decline. Gold price was rejected at that level and the sequence of higher highs and higher lows is now over. This is a sign of trend reversal in the short-term. We now look at support levels at $1,217 and $1,204 to see if the downward pressures expected will break these supports.
Blue line= support
Gold price is falling in an impulsive pattern. The high at $1,238 is important resistance and bears do not want to see this level broken. On the other hand, bulls need to hold price above $1,216 and $1,204 important support levels. Breaking these two levels will confirm down trend and increase the chanes of making a new lower low below $1,183. My target is at $1,050 for the end of the entire downward move in Gold.
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