Gold is at a decision point - 1220 is where a five month downward sloping trendline intersects. 1240 is the resistance region from the last wave higher in October. Over the last several sessions the price has been parked between 1240 and 1220.
The overall trend is still down, so if the price continues to consolidate, a decline below 1215 is a sell signal, with a stop loss above 1240.
If the price breaks above 1240, short-term upward momentum is likely to continue. 1256.2, the October high, could pose some resistance. If the price can't break definitively through 1260 it indicates gold will channel until it picks a direction.
Figure 1. February Gold Futures (GC)
The 1132 bottom followed by a (very aggressive) higher high indicates short-term bullishness, but this is still an overall downtrend. If the price proceeds lower, 1140 to 1132 has proven strong, so targets should be placed just above this. The trade can still provide a good reward to risk ratio.
If the upside breakout develops, the initial target is 1260, followed by 1280—an old support level now likely to act as resistance as long as the overall trend remains down. Based on the longer-term trend, sell signals start to occur again near 1300.