Gold price has continued higher towards $1,277 as weakness in emerging markets is being transferred to the European and US stock markets. Gold price is making higher highs and higher lows and at the same time the downward sloping trend line that connect $1,433 and $1,360 is broken. As shown in the chart below, Gold price has managed to just move above this trend line. We will soon find out if this is a bigger degree upward correction or just a fake break out.
Short-term support is found at $1,255. Short-term resistance is found at $1,280. Intermediate-term support is found at $1,230 and this is important for both bulls and bears as it will decide the intermediate-term trend. As long as Gold trades above it, bulls will be safe. If this support level is broken, then the bearish trend will reverse.
This important area is shown by the blue noted area in the daily chart above. If this upward trend continues, then we could see Gold reaching the next blue eclipse near $1,320. If the higher highs and higher lows pattern continues, then we should expect to see a move above $1,300. Short-term trend is up as long as Gold trades above $1,255. If it breaks $1,255 then it will change to neutral. Until then bullish positions are favored. Our longer-term target of $1,140 is in danger as buyers continue to support the precious metal as risk-off signals come from the stock markets worldwide.
