Gold prices as expected by our analysis have not managed to move above the downward sloping channel resistance levels at $1,220 and reversed down. Prices have broken below the short-term pivot area of $1,205 and are now testing the first important support level at $1,1195. We continue to prefer the wave scenario shown in the chart below.

The alternative preferred wave scenario implies that we are making a couple of 1-2 waves down. This scenario implies even more downside potential. We should not forget we are currently in the final stages of the downward move from $1,360. However, there is an opportunity to open short positions to take profit of the potential decline towards $1,140-$1,150, we anticipate.

The daily chart continues to show that the trend is downward. Prices continue to trade within the long-term downward channel. We remain bearish. The target is $1,140-$1,150.