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Hugo in HTO Trading,

GOLD: Broke down the upward trend line

Since the start of the year the precious metal fell more than 8% and fell more than 4.5% this past week.

Last week the Gold fell with a wide range, breaking below the upward trend line and closed near the low of the week suggesting a strong bearish momentum.

The Stochastic is displaying a strong bearish momentum and is crossing below the 50 mid line suggesting a weakness in the precious metal.

Last week Gold changed from a recovery phase to a bearish phase and is trading below all three 10, 50 and 200 week moving averages signaling a clear move the 2015 low.

Expecting a downward move to a Fibonacci extension at 1045.27 on a break below previous week low at 1085.35 (scenario 1) or a bounce from year low at 1070.83 could push the precious metal up to a key level at 1098.62 (scenario 2).