Gold has not broken below its neckline, but instead has bounced upwards towards the short-term resistance at 1,330. The trend remains downward as long as prices trade below 1,350-60 with target at 1,280-70, where the neckline is challenged. If prices break below the neckline, then we should anticipate more weakness towards 1,200 at first and then 1,150-1,140.
The daily chart shows clearly the bounce from the neckline and the fact that the trend remains downward as prices move below the downward sloping trendline that comes from 1,433 and touches 1,375 and 1,350 highs.
The short-term chart shows how gold prices after breaking down the short-term upward sloping trendline are now back testing this break level at 1,320-25. We expect prices not to be able to break above 1,325-30 and reverse downwards towards 1,300 again. We remain bearish and we look to add to short positions if prices break below 1,290 and 1,270.
