The Gold price pulled back yesterday as expected by our analysis since the price has reached important resistance levels. The Gold price has been rejected at the important resistance level of $1,312 where the Ichimoku cloud and the 61.8% retracement are. This rejection favors bears but we will need to see a follow-through today after the Fed policy announcements.
The Gold price is still below the Ichimoku cloud showing that the short-term trend remains down. The Gold price has made a lower high yesterday at $1,312 and is pulling back down. However, the form of the rise from $1,287.50 lows is promising for the bulls as it consists of 5 waves. So, today is a critical day for Gold as volatility is expected to rise. Our longer-term bearish scenario will be in danger if the Gold price breaks above $1,312. Breaking above $1,312 will be a buy signal that will most probably push the Gold price towards $1,326-$1,345-$1,360 targets. If support at $1,287 is broken, then our bearish view will be confirmed.
A daily close below $1,287 will open the way for a downward move towards $1,260 if not lower. The daily chart shows that the Gold price is above Ichimoku cloud support. We need a new lower low for the trend to change on a daily basis. Our preferred scenario remains the bearish one targeting $1,000 per ounce.
