Gold prices bounced yesterday towards our target area of $1,235-40 as expected by our analysis. Gold has now reached an important short-term resistance. If the price manages to break above $1,250 we could even see new highs towards $1,300. Otherwise we should expect a break of $1,208 and new lows towards $1,190-$1,170.
Gold remains below the Kumo (cloud) and the stochastic oscillator has turned overbought. We could see a move a little bit higher closer to the upper channel boundary near $1,250 but this will be the main test. Only a clear break and close above $1,250 will help bulls make new highs. A rejection here will bring the price back to its recent lows and even lower.