Gold prices continue to move lower in an impulsive pattern, and we believe that it could very well reach our second target of 1,200. Prices continue to be in a downward trend and below the downward sloping trend line as shown in the 4-hour chart below. Although the trend is downward, we could see another bounce towards 1,245 as prices have completed a very short-term 5 wave formation from 1,300. A bounce could push prices towards 1,240-50 before resuming lower towards 1,180.
The trend remains downward and short-term resistance is found at 1,260 and at 1,245. Short-term support is found at 1,229 and at 1,200. We expect the longer-term trend to remain downward. Bulls will need to break above 1,260 in order to have a chance of seeing the gold prices near 1,300 again.
The daily chart is unfolding as expected. The broken neckline brings in more weakness and we are going to test previous lows at 1,180 with 1,140 as the Head-and-Shoulders pattern target. In the daily time frame we remain bearish looking for new lows below 1,180.
