My dear friends here, yesterday’s drop found a bottom at 1216.7 before rising again to 1233.1 today, in another step lower. What is very interesting about this recovery is that it topped very accurately at the micro term 71.4%, since the current daily high was only 6 pips above this level. This is a sign of weakness of course. Topping at retracement levels is not good for the bulls, more weakness is now expected, but first we have to break below the rising trend line from yesterday’s low, which is currently running at 1223.0.
A break below 1223.0 should target a minor level at 1219.0 ahead of yesterday’s low 1216.7. But eventually trading below this level will not be a surprise. If this turns out to be true, one of the favorite targets is 1207.9, another is 1188.0.
As for the resistance, this level which capped this sharp recovery is providing initial resistance at 1232.5. Only with a break above this level that gold can escape falling further before the weekend. To me, breaking above 1232.5 would be some kind of a surprise, but if this surprise happens, the price will be expected to rise higher targeting at least one of the short term retracement levels at 1243.0, 1251.2, 1259.4 & 1266.0. A break above this level is highly unexpected for now, but if it happens, the precious metal will target 1275.9.
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