Gold's slide below wedge formation points to lower targets

With gold's fall stopping at $1,360 support, Stephanie Aymes, technical analyst at Societe Generale in London, said in her research note that she sees a month earlier low at $1,354 as a next downside goal.

She then projects a lower target around $1,265 to $1,285 in one to three months. That forecast is based on a measured move down from the double top formed around $1,420 in late May and early June.

Nearer term, Tuesday's rupture confirmed another double top around $1,390, the highs from June 12 and June 13, setting gold up for a downside price correction, Aymes said.

Spot gold remained 1.3 percent lower at $1,366.60 an ounce late in Tuesday's session after recovering from its earlier slide to $1,360.54, which was last reached on May 23.

Richard Ross, global technical strategist at Auerbach Grayson in New York, said in his research report that he registered medium-term support around $1,265 an ounce, which marks the 50 percent Fibonacci retracement of gold's move up from the 2008 low to its 2011 all-time peak of $1,920.

Ross' analysis shows the 61.8 percent Fibonacci retracement level at $1,149 and he puts the downside target at $1,002, the 76.4 percent retracement.

In the less likely case that buyers interrupt gold's decline, Ross put resistance at the 200-day moving average around $1,455 an ounce.

Nearer term, if gold were to scale its recent highs around $1,390, Aymes set upside targets on an hourly chart at $1,403, then $1,411 and the double top at around $1,420 an ounce.