GOLD reached 1,255 yesterday, but reversed upwards to turn positive and reached the 1,290 levels. This pull back although may have put the bearish scenario in danger, it most probably was another back test of the broken neckline. The previous support is now resistance and prices are testing that levels once again.
Now trading is below 1,280 once again, it seems that prices got rejected at the resistance level and we should expect prices to fall towards new lower lows. The trend remains downward as long as prices trade below the red downward sloping trendline. The short-term resistance is found at 1,290 and if prices break below the 1,275 support, then we could see prices test yesterday's lows.
The short-term chart shows that the upward move is not a clear impulsive wave and we believe it is a part of an upward correction pattern. We expect prices to continue lower towards 1,260 and a new low could be seen even today. The Head-and-shoulders pattern, we noted in the previous posts, remains active and its target is 1,150. We will start taking profits near 1,200, but we also would not want to be short if prices break above 1,320.
