Gold price has not managed to break above the important resistance of $1,240 and is pulling back down below the first short-term support of $1,225. The next support is at $1,215. If resistance at $1,240 is broken we will see a move up to $1,260-70. If support fails we will see a move towards $1,200-$1,190.

Red line = short-term support

Blue line = trend line support

Gold price has been making lower lows and lower highs in the last couple of days, but it still remains above the medium-term upward sloping trend line that comes from $1,140. Breaking below the short-term support of $1,215, we could see a deeper pullback towards $1,200. The upward move from $1,140 may be complete and the entire upward correction may be over. It means that we are at important resistance levels, and that we could see a reversal.

In the daily chart gold price, as expected, is back testing the breakout area of the Ichimoku cloud. A move back inside the cloud will signal a fake breakout and it will be a very bearish sign. Breaking below $1,180 will increase the chances of the bearish scenario where I expect new lows to come.