GOLD has been on a bearish trend since the middle of February and the trend has been pretty clear. There have been larger bearish moves, followed by smaller bullish ones, which are actually retracing waves. The story has been similar since the reversal took place and last week we saw Gold made the latest pullback higher.

The price fell to $1,266 on Tuesday last week and it bounced nearly $30 higher as the USD weakness returned, especially after the US GDP report which came out much stronger than expected, but the details showed that the jump was partly due to some seasonal factors such as inventories build up, which will likely unwind in Q2.

But the retrace higher stopped just below the 100 SMA (green) on the daily time-frame. That moving average provided support on the way down, so now it turned into resistance. This week we are seeing another reversal to the downside and yesterday was quite a bearish day for Gold, but the decline stopped right at last week’s low around $1,266 and the price pulled back higher. So, the downtrend is still in play for Gold, but it will resume only when the low at $1,266 which has formed a soft support now breaks. Otherwise, we might see another bounce higher.