From a technical perspective, the outlook for gold prices appears in the downside, as the price exits the Descending Bearish Channel pattern just above key psychological support at 1,860. The development of a bearish impulse movement from August 11 and September 21-23rd hint at increasing upcoming bearish momentum.
The next upside target awaits at the key psychological level of 1,900 which corresponds to the Fibonacci 50%-61.8% and will be on the lookout for topside exhaustion into channel's resistance.
A daily close above the October high at 1,930 is needed to invalidate the bearish chart pattern and carve a path to test the September swing high/ resistance at 1,970. Conversely, a break and closure below the September swing low and psychological support at 1,860 (Fibonacci 23.6% two-year lies) would probably trigger an impulsive downside pullback towards the 1,790 mark, the sentiment-defining swing high levels of year 2012 into play.
