Gold has made a lower low yesterday confirming our bearish view and the target of 1,350-60. Prices are not accelerating downwards because as shown in the chart below, the daily support trendline, depicted in the chart by the blue upward sloping trendline, stands at 1,355.

Gold, however, is making lower lows and lower highs. This implies that the trend is downward and unless prices break above 1,370 there is high probability that prices will break below support and test the 1,340-30 price level. The short-term resistance is found at 1,370 and at 1,395 which is the most important level. Breaking above those two levels, the road will be open to retest the recent highs at 1,433.

The pattern in the 1 hour chart above confirms the downtrend as prices continue to trade within the downward sloping channel. Breaking above 1,395 will signal the exit of this channel. Prices are supported at 1,360-55 and this could be a short-term bottom. It is very possible that an important bottom is being formed around these levels and a new upward move could start with new highs above 1,433 as a target. We are neutral waiting for any signal to be given by an upward or downward break of the price levels we mentioned earlier.