Gold price has fallen today towards the 50% Fibonacci retracement at $1,820. Price remains below key resistance of $1,850-60 area. We continue to expect Gold price to challenge the 61.8% Fibonacci retracement around $1,800 and this we believe would be the best area for bulls to try a long position. On the other hand bears remain in control as long as price is below $1,850-60.
Gold price is making lower lows and lower highs after reversing at $1,874. In a previous analysis we noted that we expect a pull back towards the 61.8% retracement level. Price seems vulnerable and the chances of reaching $1,800 are high. Bulls need to defend the $1,800 level in order to form a higher low relative to the November $1,763 low. Bears have the upper hand as long as price does not break above the major $1,850-60 resistance. However they will need to show more signs of strength, like a break below $1,800. At current price we prefer to be neutral. New long positions it is better to be opened if price pulls back deeper closer to $1,800.
