GOLD - USD - Gold declines after finding resistance near 1225 - 09/25/2014 (GMT)

• Gold declined after consolidating near the 1225 (R1) barrier. The precious metal is now trading between that resistance line and the support of 1208 (S1). Having in mind that yesterday’s move keeps the downtrend structure intact, I would expect the metal to challenge once again the 1208 (S1) line. Our momentum studies also support the notion. The RSI moved below its 50 line, while the MACD, already negative, just crossed below its trigger line. In the absence of any bullish reversal signals, but taking into consideration that we have positive divergence between the metal and our oscillators, I would see a cautiously negative technical picture. I believe that a decisive dip below the psychological line of 1200 (S2) is needed to trigger a larger leg down. Such a move could open the way for the strong support zone of 1180 (S3), determined by the lows of July and December 2013.
• Support: 1208 (S1), 1200 (S2), 1180 (S3)
• Resistance: 1225 (R1), 1240 (R2), 1260 (R3)