Here is a scenario for price of gold to move down
1. Pattern - consolidation within a wedge . 4 waves have completed , it may be possible the E wave is truncated.
2. Price Movement - there has been quite a strong movement away from a possible double top.
3. Fair Value - the longer term averages (100/200) sit around 1242. So reversion to the mean needs to be considered.
4. Monthly Pivot - sits at 1253.
5. Divergence - Gold keeps going up to make higher highs, but momentum makes lower highs. Who is buying the gold ?????
6. RSI has turned down and is very close to selling zone ( ie < 50)
7. Support and Resistance - the price is at near term support (A point) .
For the short I am waiting for a break of support ( below the hourly candle wick of 1264.32) and the daily candle to close beneath.
Stops - 1. Aggressive - just beyond the wick of this daily candle. 2. Conservative - above the double top ( this is a large stop )
Targets 1. .382 fib/trendline support/ S1 pivot ( they all line up) @ 1229. 2. The origin of A point , just beyond the .618 fib @ 1180 ( shooting for the fences)
A hawkish fed will aid this scenario...... :)