Gold price has extended its decline below $1,300 towards our next target of $1,289 where we find the 38% Fibonacci retracement of the rise from $1,196. A bounce towards $1,300 could be seen this week, but I believe that it will only be short lived and a new lower low will be seen.
Gold price has reversed short-term trend to bearish. As expected from $1,340 when we were calling for a bearish reversal because of the bearish divergence signs, Gold is now trading at $1,290-87 area. A short-term bounce towards $1,300 (38% Fibonacci retracement of the last leg down) is expected to be seen. Any bounce is considered a sell opportunity as the RSI has not reached oversold condition yet. In shorter time frames the RSI is in oversold condition but not bullish divergence is found (4 hour). This implies that a bounce could come but the downside in Gold is still not finished. Next target would be the touch of the upward sloping red trend line support around $1,250.
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