Gold price has found support above $ 1,318 and is now trading near $ 1,338. Gold price is ready for a bounce higher towards $ 1,350-$ 1,360. This upward move is corrective, and we will look to go short with $ 1,390 as a stop and the $ 1,300-$ 1,270 target area.
Short-term trend has changed to upward. I expect Gold price to move towards the Ichimoku cloud and between the 50% and 61.8% Fibonacci retracement. So I will wait for a move towards $ 1,50-60 to think of selling short expecting another leg down. We follow this strategy to go short in a coming bounce because there is high probability the entire break out was a false one.
The break out from $ 1,340-50 to $ 1,390 could very well be a false break out and that is why we look to go short if price bounces towards $ 1,350-60 with $ 1,390 stop. We expect Gold price to move higher and then resume downtrend towards the daily Ichimoku cloud at $ 1,270-90.