Gold drops sharply to as low as 1266.26 so far today and breached 1266.30 support. The development is inline with our bearish view noted before. Whole decline from 1346.71 is still in progress and should now be resuming. Sustained trading below 1266.30 will target 100% projection of 1346.71 to 1280.85 from 1324.49 at 1258.63. For now, near term outlook will remain bearish in any case as long as 1288.67 resistance holds.
Looking at the bigger picture, decisive break of 1258.63 will indicate downside acceleration and solidify the case of medium term reversal. That is, rise from 1160.17 has completed at 1346.71 after being rejected below key fibonacci level of 38.2% retracement of 1920.70 to 1046.37 at 1380.36 again. Further fall should be seen to 61.8% retracement of 1160.17 to 1346.17 at 1234.42 and below.
