Gold (daily chart) has rebounded from the double-bottom low that was initiated in June 2013 at 1180 and then retested towards the very end of 2013 at 1178, which establish more than a three-year low. The current rebound has brought the precious metal up to approach both key resistance around the 1265 level as well as a major downtrend line extending back to the August 2013 high around 1433. In the process, gold has risen above its 50-day moving average, although it is still far below its 200-day average. Both of these moving averages are still pointing decisively to the downside.
If the metal is unable to break out above the resistance imposed by both the noted 1265 area and the downtrend line, a continued bearish environment should prevail. Any further breakdown below the 1178 low would confirm a continuation of the sustained bearish trend that has been in place since the October 2012 1800-area high. A breakdown below 1178 may then potentially position gold to target further downside around the 1000 psychological support level. To the upside, a breakout above the noted nearby resistance should find further key resistance around the 1300 level.