Gold futures continued to trade bearishly this week, even as they churned sideways.

Technicians now believe that gold is in wave “(iii) of iii” lower with potential support at 1205.70 and 1137.70.

As gold is oversold, technicians note that selling at current levels could be dangerous. They recommend aspiring sellers wait to for rallies into which to sell.

The technicians note that such "selling into rallies" by aggressive traders may ramp up at or near 1265 in conjunction with overbought readings on the %R indicator.

Meanwhile, technicians note that big money buyers are likely to stay away until the extreme low target of 1137.70 is tested.