Gold price has broken down the sideways channel since last week and remains in a short-term bearish trend targeting a bigger pull back towards $1,150-$1,100. Even if price reverses higher for a new higher high above $1,283, the upside is limited and a deep correction is due.
Green line - resistance
Price is below the Kumo (cloud) in the 4 hour chart and is trending lower with bearish flag formations. A back test of the broken channel could be seen at $1,240 but I believe an important top is in and from now on any bounce should be sold as Gold is heading lower. Support is at $1,212 and resistance at $1,240. The 38% Fibonacci retracement of the $1,045 low is the most important support level in the short-term so a bigger bounce could be seen if we touch that area.
Green rectangle - important top areas
As I was bullish Gold near $1,050-$1,100 because there were bullish divergence signals in the weekly chart, now I am bearish despite the break above the Kumo (cloud) and the downward sloping wedge. Yes, Gold might have made a long-term reversal and important low at $1,045 but now it is time for this scenario to be tested. A strong pullback is expected in Gold as the upside is limited on a weekly basis. Important levels to watch for re-opening long positions are at $1,100-$1,150.