The bulls need to hold this level on a closing basis and see some follow through buying after Tuesday's breakout, otherwise there is a danger of further selling, as the prospect of the move developing as a "fake out" increases.
The dollar is attempting to reclaim the 80 level, whilst oil is consolidating recent gains around $98 a barrel. Today sees the weekly jobless claims data released, along with US retail sales and business inventories.
Support can be found at 1240, 1235, 1223-1227, 1217, 1212, 1200-1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1250-1255, 1268-1270, 1277-1280 and 1291-1295. A break above 1260 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at some targets for this rally and our strategy for our next trade.