A closing breach of $1276 is a big bearish breakdown and completes a big medium term top pattern to imply $1206. Intraday rallies are increasingly being sold into.
Often when there is a strong move, the next session can see a retracement. The concern is that for much of yesterday’s session, gold was trying for a recovery, but there was little appetite to buy. A close below $1276 is a key downside break. It now means that the old key support band $1276/$1280 is a basis of resistance. Yesterday’s close below $1276 has confirmed what looks to be an increasingly negative outlook on gold. Such is the importance of the breakdown, a second closing breach of $1276 would confirm the bears being in control. A head and shoulders top pattern implies $70 of additional downside in the coming months. This means a retreat towards $1206 could be seen in the coming months. The outlook is increasingly negative now, with the support of the eight month uptrend at $1259 and the 144 day moving average (at $1273) being the only positive technical signals. The next real support is not until an old pivot around $1240. The hourly chart shows resistance is at $1280 initially and a pivot at $1290. This all comes under the long term pivot band $1300/$1310 which is increasingly key resistance.