Gold has been repelled on Tuesday at key resistance of around $1270 and has corrected to 1237.10 as I write early Wednesday morning (8am UK time). The price is actually falling out of the nice little steep uptrend channel formed since last Friday which ran from $1180 to $1270 in 2 days.
Last night, I made a chart showing the context of the current modest upmove that has been heralded as the major market turn by the bulls.
It shows the red bearish triange that broke down some days ago and the bottom at $1180 that is roughly in line with the plunge low of $1380 with respect to the downtrend. The bottom of the channel was almost hit at $1180. See below:
Now, there is also a steeper downtrend line shown in blue that comes from the start of the April crashand forms a couple of wedges. The price is trying to break out of these wedges, which might be interpreted as bullish falling wedges, perhaps. As I write, the price has fallen out of Wedge 1. The chart below shows that the price at $1242.30 was just slightly below Wedge 1 but is now at $1238.
There are 4 touches at this blue resistance line so I view it as important.
Looking again at the shorter term chart trend channel, shown below, resistance became support and has now reverted to resistance with respect to the uptrend channel, after being capped by the blue line in the longer term chart above.
Doesn't look too good right now, though this little uptrend was actually steep V-shaped bounce and a pullback might allow a more sustainable uptrend.
However, if gold re-visits the lows, wedge 2 could fail and then we could perhaps look forward to another $270 drop from the low at $1180, taking the price to $910. What the goldbugs will want is a move above the blue resiatcne line and then the wedges become bullish falling wedges with a chance of undoing the entire crash in price and sending it back to where it started at $1590.