Gold price continued its decline on Friday as we expected towards $1,250. Price stalled at its short-term cloud support at $1,265. There is a chance of a bounce towards $1,280 before the next leg down, or a straight move lower towards $1,250 to complete the correction.
Price is trading right on the edge of the 4-hour Kumo (cloud) support and still inside the bearish channel. There are some bullish divergence signals that justify a bounce for a couple days. However, if we get rejected at the upper channel boundary now, expect price to decline towards $1,250 very fast.
As mentioned in previous posts, I expect Gold price to move towards the cloud support around $1,240-50. The double top formation is a very bearish sign that could open up the potential for a move even lower towards $1,200. For now we focus on the scenario where the decline stops at the daily cloud support and reverses.
