With a strong sell off wiping out its Wednesday gains to return the commodity below the 1,329.25 level, its Dec 16'2010 low on Thursday, more downside threats are now targeting lower prices. In such a case, its present weakness should push Gold further lower towards the 1,300.00 level, its big psycho level. We expect that level to provide a strong support and turn the commodity back up on an initial test but if that fails, expect Gold to decline further towards its long-term rising trendlineat 1,288.75. Its daily RSI bearish and pointing higher, supporting this view. However, we will have to see a break and hold above the 1,378. 80 level followed by the 1,392.25 level, its Jan 13'2011 high to annul its present weakness and set the stage for a move higher towards the 1.431.28 level. Further out, support lies at the 1,450.00 level. All in all, though the commodity still holds on to its long-term uptrend, it continues to face the risk of further corrective declines.
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