The Gold price broke to new highs yesterday and came very close to the January highs of $1,365. However, buying interest did not last long at those levels and a reversal with medium-term bearish implications followed. The inability for Gold to finally break above $1,365 and the pull back towards $1,350 is not a good sign.
Red line - long-term resistance
Blue line - support
Green line - long-term support
The long upper tail of yesterdays candle is a bearish sign and a sign of weakness and inability to break the long-term resistance. If bulls can hold above $1,340 and make another try and break above $1,365, then we will have the much-awaited breakout. If bears remain stronger and push price towards $1,330-20 we will have a false breakout and the trap will be closed for bulls. This could have longer-term bearish implications as such formations and false breakouts signal the start of big reversals. So $1,300 could be broken if this proves to be a false breakout. Bulls no matter what will need to hold above $1,340-30.
