Gold price despite making a small upward bounce towards $1,360 yesterday, it has reversed lower implying that a bigger degree corective move is in play. The downward move in Gold is impulsive in nature and I will expect an upward bounce towards $1,375 before going short. This downward correction will at least move towards $1,300 if $1,330 is broken. Our sell signal was given at $1,375-78. Now price is heading towards the longer-term trend line support and the Ichimoku cloud.

An upward bounce is very possible from this price area. If $1,340 support fails to hold prices, we should expect $1,320 as our next target. Resistance is now found at $1,360-70 area. An upward move wil be the second part of a more complex correction that we believe we are in. A third leg down is expected to bring Gold price towards $1,280-60.

The reversal at $1,390 brings Gold price towards the downward sloping trend line at $1,330. This trend line was once resistance and now is support that is going to be back tested. The first upward bounce is expected to come soon or if price reaches $1,330. The upward bounce we expect should be sold with the highs as stop and $1,280 as target.