Gold bulls have enjoyed a big relief bounce from $1,763 low to $1,843. My bounce expectations where not that optimistic, but the market knows better. Gold price has reached just below the major resistance that was once major support. The $1,850 area is important resistance and a rejection here could be the start for the next downward move.
Gold price today reached $1,843 but price is making new intraday lows at $1,823. Bears want to see price continue lower towards $1,800 and break again below it. Bulls on the other hand need to defend $1,800 and gather momentum for a break above $1,850.
Gold price could start a pull back or a new downward move from current levels. First important short-term support is found at the 38% Fibonacci retracement at $1,812. Next support is at $1,804 and finally at $1,794 we find the crucial 61.8% Fibonacci level. To be precise bulls need to defend the 61.8% retracement. Bears need to break below it. Selling near resistance ($1,850-60) is preferred currently as price could start its next leg downwards towards $1,725-$1,750. Bulls should better wait for a pull back towards $1,800 in order to try a new long position.
