Post the five wave decline formation, gold has bounced to retrace the impulse. With the bounce it has reached the 50% retracement mark and the falling trendline. The 20 week moving average (WMA) is also near the same region. In terms of wave structure gold has formed an ending diagonal in the third leg of the pullback. Itremained well within the cut off level for the pattern, which is $1,690. The daily momentum indicator is also showing loss of strength on the bulls’ side. The target on the downside is $1,545 (the daily lower Bollinger Band). On the other hand reversal can be kept at $1,682 on a closing basis.