From the bullish price action I discussed yesterday, price pushed significantly higher very quickly. Price pushed into the key resistance zone of 1205-1215 last night and this morning broke above, reaching as high as 1218. This 1205-1215 zone was a critical zone to hold as it is a major road block to gold putting in a real bottom. Unfortunately for the bulls, price was slammed back down and formed a very bearish evening star pattern. Due to this weakness and golds inability to hold above this zone I think we could see price tumble back lower to trend line support(1200), first key support(1190), and/or second key support(1166).
Very useful analysis. I would add however, that the big New York sell off on the evening star is not unusual action in gold trading. In fact that New York sell-off is so common it's referred to by gold bugs as The Hammer Man hit on gold. So I would not be entirely bearish on that action.
krugman25
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@Goldxer, Bearish fakeouts occur in all markets and I treat them all equally the same. We shall see what becomes of it.