The upward correction in Gold prices from $1,180 will soon reach an end. Prices could very well have already topped and the downward move could already have started. However as long as prices trade above $1,234 there is still a chance that we can see gold prices reach $1,270.
Gold's rising wedge seems broken but we could see another try to reach the blue noted area in the above chart where our initial correction target was. We prefer to look on the bearish side using close by stops. In this case we would use the recent high as a stop at $1,259.50. If prices break below $1,234, we will have a confirmation of the important top. The rise from the recent lows is far from impulsive. The form of the rise implies that this is just a correction and when it will end, the downward pressures will resume.
The daily chart confirms that there is strong resistance in the area that gold is currently trading in. Not only the previous neckline provides resistance, but also the downward sloping purple channel boundaries provide strong resistance. That is why we believe that it is time for gold prices to reverse downwards again. Our longer-term target remains $1,140.
