Gold price bounced yesterday after a sharp decline towards $1,090. It managed to reach only the 38% retracement. The price has been sliding lower since then last night we saw gold prices going back below $1,100 once again. With $1,095 as a short-term low support, gold prices try to bounce again, but the trend remains bearish.
Blue line – trend line resistance
Gold prices remain below the blue trend-line resistance and the Ichimoku cloud. As long as the price is below $1,130-40 resistance we should be heading towards $1,030 or even $900. The price bounced right at the 38% retracement and got rejected. Short-term resistance is seen at $1,120. If it gets broken, we could see a bounce towards the 61.8% retracement of $1,135.
Blue line- long-term trend line support
Red lines – equal size decline projection
The blue trend-line support is broken. Unless we see a back test towards $1,135-40 soon, we should expect a decline in gold prices to be of similar size to the distance from the trend-line support to the January highs. So, gold is expected to move towards $1,000 or even lower in coming weeks.
The material has been provided by InstaForex Company – www.instaforex.com