Gold remains weak testing the recent lows. There are increased chances that we may see the area of $1,040-50 visited before a bounce, but this not be taken for granted as a decline is not as steep and hard as one would expect in case of a breakout at $1,077. Now is the time to focus on the bigger picture. A short-term trend is bearish, but a big bounce will come soon.
Green line - support
Gold price remains below the 4-hour Ichimoku cloud. The price is trapped inside a triangle pattern. Although earlier today we saw the support level being broken, there was no accelerated selling or additional pressure to push prices lows. It seems that everyone is short and there are not many people who want to sell. If I was a bear I would be very skeptical with gold price not pushing lower.
On the other hand, I would focus on the medium- to long-term as there are signs that gold might be heading a long-term low at current levels. Reaching new lows may be needed to complete the decline from $1,190, but I believe a strong bounce towards at least $1,120-30 will follow if not a longer-term trend change.
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