On the chart –
Gold had a failed attempt to breakout of the flag/pattern and adding to the woes $1300 was rejected comfortably indicating heavy selling pressure at the higher levels. This kind of move suggests the continues to persist. We have 2 scenarios –
1. Bulls made a mockery of the initial rally as they failed to keep the prices afloat resulting in negative week and the price remaining inside the flag thus keeping the alive.
2. Gold closed below the support, till this is respected it can move towards $1273. If this is broken it can move to $1260. And if this is taken out it can fall towards $1248.
Bulls had a failed attempt at the breakout making them stay at the sidelines again.
view – Bears clawed back over $28 from the highs continuing their assault as they prevented the metal from breaking out. The bear strength was clearly visible when the price hit the resistance of the and collapsed even when fundamentals were not that supportive of such a fall. For bears to keep the trend intact they need to prevent gold from breaking out and new lows can be visited with next major being $1236-$1240.
On larger terms, Gold remains and prices are expected to head lower.
Possible trades are on both sides, gold can be bought once it breaks out of the flag or at the bottom of the flag/channel.
Gold can be sold under $1273 for the targets of $1260 and $1248 with a stop loss placed above $1287.
A sell-on-rallies can be useful under current scenario.