FxWirePro: Is gold in for bigger drop down?

We at FxWirePro, remain bullish on Gold over longer horizon, however we mentioned before and will do so once more, that Gold has a potential to reach as high as $1600/troy ounce, however for that it needs to break above $1350/troy ounce key resistance and unless it does so, there is a risk that Gold may drop to as low as $1000/troy ounce.

Goldman Sachs recently revised its downside target from $1000/troy ounce to $1150/troy ounce but we would maintain our $1000 possibility if the resistance isn’t cleared.

However $1000 isn’t our base case scenario, in the short run and we strongly expects Gold bulls will provide support around $1180/troy ounce area. Currently trading at $1223 per troy ounce.

Nevertheless, we pose this concern. Why?

Have a look at the chart. Gold broke above the channel that has been in place since mid-2013 and it decisive broke above it in April this year but last four weeks price actions suggesting that it could have been a false break out.

Hence there are reasons to worry in the short run.