Gold’s unsuccessful attempt on the $1240 resistance precedes a slide towards $1185
The crucial $1240 resistance capped gold’s attempts on the upside; although a second test is possible, we consider the current market levels good for the initiation of fresh short positions.
In the last couple of days, gold succeeded in regaining some lost ground. Today it tested $1240, and the attempt could already be considered a failure on the evidence provided by the 1-hour chart. We are waiting for a confirmation on the 4-hour frame, so that our judgement can be more precise.
The $1240 level should provide solid resistance and reinstate bullion’s long-term downtrend. Short-sellers currently have the chance to open their positions somewhere in the $1240-$1235 area. Profits should be taken around the $1185 zone. Given the significance of this resistance, it would be smart to book profits a bit earlier. Stop losses need to be placed above $1248.
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