Gold price made a strong reversal yesterday and is breaking below short-term support at $1,200 now. Gold price reversed right from weekly kijun-sen resistance as expected. There is a strong probability that we might have started a new downward move that will bring gold price to new lows.
Red line = support
Gold price is breaking below the short-term trend line support. The price is also breaking below the kijun-sen in the 4 hour chart. Next support is seen at $1,170 where cloud support is found. I believe, we are going to test that support. If we manage to hold above that level, we could see another upward bounce towards $1,230-40. If we break the cloud support, I expect new lows to be set.
The weekly chart remains fully bearish. The price is below the Ichimoku cloud. The weekly candle reached kijun-sen resistance and got rejected. The long tail above this week’s candle is not a good sign for bulls. I give more chances to the longer-term bearish scenario with targets at $1,000-$900. Important weekly support is seen at $1,130.
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