FX.co ★ Gold Technical analysis for August 1, 2014

The Gold price is currently trading below the previous low at $1,287.50. The trend is down as the price is making lower lows and lower highs. In our previous analysis, I mentioned how important it was for bulls to hold above $1,287.50 and break above $1,313 in order to move towards $1,325-50. On the other hand, our preferred bearish scenario would be confirmed if the price broke below $1,287.5. This is what happened and our bearish scenario remains strong.

The Gold price is below the Ichimoku cloud resistance at $1,300 and has made a new lower low at $1,280.50. Currently, it is forming a bearish flag that we expect to see if broken downwards. If the price breaks below $1,280, I expect to see the Gold price move towards $1,270 at least.

The daily chart is not good for bulls either. The Gold price after a long time has broken below the Ichimoku cloud and this is a sign of further weakness. Our preferred scenario for some time now has been the one where wave E of wave 4 was complete at $1,346 and a new downward move has started with $1,000 as the first target. A break below the upward sloping red trend line at $1,260-70 will increase the chances of this bearish scenario.