In our last analysis for April 17th, we identified two sell zones to add short positions. First zone is 1280-1283. And the second zone is 1285-1288. Today gold has reached our first sell zone, trading as high as 1282. We believe gold can turn down from our first sell zone at 1280-1283. Hopefully, you were able to add a short position at that zone as we recommended.
Take a look at the daily chart above. Gold formed a descending triangle at the top as a reversal pattern. It broke down under the flat lower line and reached our support at 1267. Also in our last analysis, we said we expected a bounce from that support. And gold did bounce up. Gold has been up from 1267 to 1282 to re-test the lower flat line, which now becomes strong resistance. If gold does not manage to close above the lower flat line, we think it will turn down hard from here. There is a possibility that gold can spike up to our second sell zone at 1285-1288. If it does, it will be even a bigger opportunity to add another short position there.