Gold prices bounced upwards as expected for the bigger degree wave 4. We noted yesterday that the wave formation was not a complete impulse down from 1,360 and so prices in order to complete 5 waves down needed to make an upward bounce for wave 4 of bigger degree and a new lower low for wave 5. Wave 4 happened yesterday as prices had risen towards 1,245$ where we expected wave 4 to move.

The preferable wave structure is shown above. Prices moved in the area of the previous 4th wave of lesser degree and touched the downward sloping trend line. Now prices are pulling back down after being rejected by the downward sloping trend line.

Longer term trend remains down, but for the short term we can see prices concluding their downward move from 1,360$. So bears should be extra carefull at these levels, specially if prices break above 1,258$. This should be the stop for short positions. Target for wave 5 to end is between 1,200-1,180$.