Gold dropped sharply yesterday indicating that 113% correction at 1384.90 was strong enough to weaken the bullish harmonic AB=CD pattern’s effect. The drop pushed the gold now below top C of the pattern, as the metal is currently trading below Linear Regression Indicator 34 and 55. Those negative catalysts are combined with a long bearish candle and that worries us in regards to the negativity showing on RSI and traditional MACD.

Therefore, we will remain neutral for now as the overall upside move is still valid but trading again below 1361.10 weakens intraday positivity, we do not want to take risks after yesterday’s long negative candle which contradicts with the bullish harmonic AB=CD Pattern’s positive effects.

Based on the above we prefer to remain on the sideways waiting for more confirmations.

For traders will to take the risk with the negativity on indicators and failure to breach 1384.90 sell gold below 1361.50 targeting 1356.60, 1347.20 then 1341.10 and stop-loss above 1384.90.