Gold price has broken today below $1,800 surpassing our initial expectations. In our posts for the last few weeks we were bearish at $1,900-$1,915 area warning bulls of a coming reversal and correction towards $1,850-$1,820. Our target has been achieved. Gold price has now reached important Fibonacci support levels.
Gold price is approaching the key Fibonacci retracement level of 61.8%. We usually see reversals at this retracement, however it is still too early to talk about a reversal. Gold price is in a bearish trend and reaching the 78.6% Fibonacci retracement at $1,730 can not yet be ruled out. There is no bullish divergence in the 4 hour or daily chart in Gold, so there is no reversal signal. Until we see some weakening of the downtrend, Gold price will continue lower towards $1,730. Nevertheless bears need not be greedy as we are approaching key support levels. An RSI bullish divergence is not necessary for Gold price to form a higher low and reverse trend.