XAU/USD 4H Chart: Channel Down

There are still not so many reasons to suspect that XAU/USD is trading within the boundaries of the downward-sloping channel. But if we assume this pattern to correctly reflect reality, the price is likely to stay below the resistance at 1,320.51 (falling trend-line, weekly R1 and 200-period SMA), slide south from the current trading levels and then rebound from the potential support trend-line at 1,227.93. However, the long-term bearish tendency implied by the formation may not last for long, being that gold is approaching levels not seen since the summer of 2010. Accordingly, if the direction does not change, there will be a good chance of a reversal near 1,179.84.