Gold’s recovery from 1280.85 lost momentum after hitting 1324.49 and retreats notably today. The structure of the recovery suggests that it’s merely a corrective move. And it could be ending soon.
Hence, even in case of another rise through 1324.49, upside should be limited below 1346.71 high to bring another decline. On the downside break of 1303.25 minor support will bring deeper fall to retest 1280.85 support.
In the bigger picture, it’s getting more likely that 1346.71 is a medium term bottom on bearish divergence in daily MACD. Channel support will likely be taken out on next decline, which will put 1276.76 cluster support (38.1% retracement of 1160.17 to 1346.17 at 1275.45) back into focus.
Decisive break of 1275.45/1276.76 should confirm completion of whole rise from 1160.17. In that case, gold should have started another falling leg inside the long term range pattern. Deeper fall should then be seen back towards 61.8% retracement at 1234.42 and below.
But still, as mentioned above, break of 1303.25 support is needed to indicate near term reversal first.
