Gold pattern busted, silver maintains downtrend

Over the past couple of weeks, we have talked about a possible Shoulder-Head-Shoulder pattern emerging in gold. It was actually confirmed as the price broke below the neckline but from there it couldn’t really get downside traction. 

Buyers repeatedly tried to push the price back above the neckline. And yesterday they succeeded in a massive so-called pullback, which occurs when the price is pulled back above the neckline. 

According to the theory of Shoulder-Head-Shoulder patterns it is not really busted until the right shoulder at around $1,325 has been taken out to the upside. But with the strong move yesterday I don’t think there is any reason to sit back and wait for that to happen. 

The falling trendline has been breached (dark blue line) and the short-term trend has been reversed. $1,325 is the next resistance. 

If XAUUSD drops back below $1,280 the uptrend is likely to be reversed.