This pattern is usually a reliable reversal indicator that suggests that the price will fall for the next few weeks and we would not be surprised to see a return to 1250, particularly if the dollar continues to find buyers.
The oil price is plunging and is now below $95 a barrel, suggesting that inflation is not a concern or expected in the foreseeable future.
Support can be found at 1310, 1300-1306, 1291, 1277, 1260, 1250, 1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 as a minimum.
Resistance can be found at 1318, 1328-1330, 1338-1342, 1352-1355, 1360, 1375, 1400 and 1434. A break above 1434 would suggest a major rally was unfolding with a target of 1525 as a minimum.
Today's video for subscribers looks at the recent trading action and the "bearish engulfing" candlestick pattern in more detail, as well as our strategy for our current short position.