Gold price made a strong pull back yesterday towards $1,310 breaking below the short-term support trend line providing a short-term top at $1,324.50. Medium-term trend remains bullish as long as price is above $1,300-$1,280 area.
Blue line - short-term support trend line (broken)
Green line - major trend support area
Gold price despite the $14 pull back from $1,324.50 to $1,310 continues to make higher highs and higher lows. Although we have a short-term bearish signal by breaking below the blue trend line support, medium-term trend remains bullish as long as Gold is above $1,280. Currently Gold price has pulled back towards the 38% Fibonacci retracement of the last leg up. Price could continue lower towards $1,300-$1,296 area where we find the 61.8% Fibonacci retracement level. Don't forget that Gold price topped just above the 61.8% Fibonacci retracement of the decline, so keep this Fibonacci level in mind as it is very important. Gold bulls were warned to be cautious. Now they want to see Gold price find support around $1,300 and then start a new leg higher and eventually break above $1,324.50 for a move to $1,350-60. On the other hand bears do not want the top at $1,324.50 to be broken. As long as price is below this level they hope for new selling pressures to arise and push price below major support levels at $1,280. This would open the way for a move towards $1,250-60 area.
Concluding, major levels to keep in mind are at $1,324 and at $1,280. $1,300 is also an important level to keep in mind but not as decisive as the other two price levels.
The material has been provided by InstaForex Company - www.instaforex.com