Yesterday, we mentioned that our favorite wave scenario was that we are currently in wave 4 and a final wave down to new lows was anticipated. The confirmation would come if $1,220-$1,210 was broken. We also expected prices to break resistance or support levels after the announcement of the FED policy regarding the tapering of the QE program.

Gold prices broke down and are now trading at $1,200. As long as prices trade below the purple trend line resistance, we will remain short with $1,180-$1,190 minimum targets. This is most probably the final 5th wave from $1,360.Stop for bears now is the $1,245 level. Bulls could find support at $1,190-$1,180 where the previous lows are.

The daily chart continues to support short positions as trend remains downward. Important daily resistance is the $1,268 price level. A daily close above that price level will confirm trend reversal in the short term. Our target remains at $1,180-$1,190 in the short term.