Gold price has reversed lower after reaching $1,245 and making a higher high than the one made in the early December. Despite a higher high sellers have pushed the precious metal back below $1,230. If this is a fake breakout, the reversal will be destructive and we could see new lows, specially if support at $1,200 fails to hold.
Gold price short-term trend remains bullish. The Ichimoku cloud is below the current price and provides support at $1,200. Short-term support is found at $1,215 and short-term resistance at $1,245. A new higher high above $1,245 will confirm bullish trend, so that we should expect gold price to reach $1,260-70. If, on the other hand, gold price breaks below $1,200, we could say that the short-lived breakout was fake and prices are going to fall towards the lows at $1,130.
Gold price as shown on the daily chart above is pulling back inside the triangle. This could be a fake breakout. If this is true, we should expect gold price to move sharply towards $1,180 and then towards the recent lows at $1,130. If, on the other hand, gold manages to break above $1,245, then the bullish scenario with $1,270 as the first target will be preferred.
The material has been provided by InstaForex Company - www.instaforex.com
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