If you have been following for more than a couple of months I have been saying that I remain long-term bullish Gold and that a correction between $1,220-$1,170 could unfold specially if $1,300 was broken. Gold price made a low at $1,240 (where I called being short-term bullish again) and spiked to $1,340 after the US elections. I was worried then that a possible rejection would lead to a deeper pull back. And that is exactly what happened. Gold price broke support at $1,240-50 and the next target are of $1,220-$1,170 had opened up again. Gold price at $1,375 had already got rejected at the important long-term downward sloping trend line resistance as can be seen in the weekly chart below.
Gold price has broken of course above the weekly Ichimoku cloud resistance and with RSI diverging for several months now, I believe Gold has made a long-term low at $1,045 and that this current pull back is the best opportunity to go long before the next big upward to $1,400-$1,500.
Gold price is currently finishing or has already finished wave 2 down right on top of the Ichimoku cloud. Price has not reached the 61.8% Fibonacci retracement and that is why I remain skeptical that we might see a new lower low. Cannot rule out a push below $1,200. The same stands for silver. Price has already reached the 61.8% Fibonacci retracement and I believe we can see a trend reversal from current levels.
Silver is also above the weekly Ichimoku cloud and the form of the decline is very similar to Gold’s decline that is corrective of nature. On the other hand the upward moves are most probably impulsive waves up and since a corrective wave followed, I would now expect a new impulsive move up to new highs. However the Dollar seems to be very strong and negatively related to price action in these metals. So a bearish reversal in the Dollar index will be the first important indicator that an important low in Gold and Silver is in.