February Gold futures (GC) have continually put in new yearly lows since mid-November. On December 3 the price hit a low of 1054.4, the lowest price so far this year...and you have to go back to early 2010 to see the last time gold traded near 1050.
This decline puts gold at the bottom of its descending trend channel, in effect since 2013. The bottom of the channel has provided support over the last 2.5 years, causing the price to bounce off of it. Unfortunately, that doesn't make this an immediate buying opportunity for gold.
Figure 1. Gold Daily Chart
The trend is down, both long-term and short-term, and the price could break below the channel, accelerating the downtrend. That's the bearish case.
If support does hold though, only then does it present an opportunity to buy in anticipation of a pop to 1150 to 1160 (long-term trend is still down). The price is already showing evidence of a slowdown in selling. Since mid-November the price has dropped but it has been very choppy (compare to selling in early November) and more hesitant.
If we see more sideways movement near the support area, that will provide a small range, along with entry levels. Refer back to July and August for an example of this type of pattern. A break above the small range (yet to develop) sets up a long trade into 1150 to 1160. A drop below the small range indicates the trend channel is likely broken, and the downtrend is accelerating. The next downside target is the psychological level of 1000, followed by 925.