When we last reviewed gold in November, it had dipped below an important level of support.

As we noted back then:

…a failure to retake the broken TL would indicate lower prices to come. [The channel placement] is tricky.  In this case, I’ll give more credence to the upside if/when the red trend line of support (now resistance) is breached.

Wouldn’t you know…gold popped back above that red TL and is currently going strong.  As noted before, I wouldn’t put too much credence in the placement of a very long-term channel like the white one below.  But, the TL is clear.  And, as long as prices stay north of 1180 or so, all is good.

If they don’t, the close-up shows the strong case that could be made for a drop to the yellow .500 Fib at 1089.40.  But, of course, that would require the trend line and previous lows (1140ish) to break down again.

Bottom line, the argument is for a reversal here at the white .500 at 1302.  It also represents a backtest of the yellow .382, the midline of the purple channel and the top of the iffy red channel.

GLTA.