Gold prices have broken the lower boundaries of the sideways consolidation we mentioned in yesterday's analysis. The lower support boundaries were important if the upward bounce was to continue. We expected prices to make another upward bounce, but support failed to hold prices. Once support was broken, it was a matter of time to see new lower lows.

The chart above shows clearly the purple sideways channel that we mentioned yesterday. We were bullish as long as prices stayed above the lower purple line. Below that line we were expecting new lows. Now that prices have made a new lower low, the 1258$ high has increased importance for the intermediate term trend. Bulls will need to break above that level in order for short term trend to change.

The daily chart confirms that trend is down. Prices trade within the downward sloping blue trend channel. The pattern of lower lows and lower highs confirms this view. Trend will change only if prices break above 1258$. In the very short term, we could see an upward bounce towards 1240-45 channel resistance and then another new lower low towards 1210$. We remain longer term bearish, but in the short term we believe that Gold is oversold and we should see an upward bounce.