Gold failed to see follow through buying yesterday, with the price steadily drifting lower all day in what initially looked like a classic "bull flag" pattern.  However, the selling accelerated towards the end of the afternoon, negating this pattern.

Gold found support at the rising trend line of the newly forming uptrend and has moved up with the trendline this morning.

If this trendline breaks, as looks likely as we write, we expect gold to fall back towards the 1550 area.

The bulls will be disappointed to see the lack of follow through buying yesterday, suggesting the move up was merely a "knee jerk" reaction to Bernanke's testimony to Congress.

However, until the trendline breaks the bulls can have some hope that the price is heading higher in the short term.

Today's video looks at previous "bull flag" patterns and our strategy for our current trade.

In early trading yesterday, gold moved in a narrow range in anticipation of Ben Bernanke's testimony to Congress.  On the release of the statement, the price initially fell $10, before finding support and powering higher, moving $36 higher to hit a high of 1620.

The market then fell back a little, closing at 1615 and this morning is consolidating yesterday's big gains.  The market is currently trading around 1609.

We mentioned to our subscribers a couple of days ago that, due to the extreme oversold market and overwhelming pessimism towards gold, there was a reasonable chance of an upside surprise following Bernanke's testimony. 

Even though nothing new was said, the fact that the market had priced in gold negative news to such an extent meant that a rally resulted anyway.

This powerful rally suggests that the correction is over, however we want to see follow through buying today to confirm the move.

Today's video looks at yesterday's price action in more detail and our price targets for this rally.

Gold moved steadily higher yesterday, finishing near the highs of the day at 1595 after finding support at 1584 on the downside.  This morning, in the face of weaker oil and silver and a slightly stronger dollar, gold is continuing this move higher, hitting a high this morning of 1602.

This price action is very encouraging in light of the these outside markets - the bulls will want to see a close above 1600 today with targets of 1610, 1618 and 1630 in mind.

Today sees Ben Bernanke start his 2 day testimony to Congress, where he will be answering questions on economic policy.  The markets will be particularly keen to hear what he has to say on further quantitative easing and other economic stimulus measures, this could result in increased volatility as the markets digest his words.

Today's video looks at the price action of the past couple of sessions and our targets for this recovery rally.

Gold stabilised on Friday, finding support at 1570 and resistance at 1587 in quiet trading to form a "doji" candlestick on the daily chart.  This morning, gold has seen some buying support enter the market and has moved up to currently trade around 1590.

The market remains extremely oversold, with the RSI at levels not seen in the past 5 years on the daily and weekly charts.  With the decline in gold halting on Thursday and stabilising on Friday above 1550, the potential for a recovery rally increases with every hour that gold remains above support at 1550.

The oil price is also stabilising after huge declines last week and the dollar has also stopped rallying, giving some much needed respite to gold.

Today's video looks at the trading action of last week in more detail, outlines our strategy for our next trade and looks at potential targets for a recovery rally.

Yesterday saw gold start to recover after the precipitous declines of the previous week, with the price moving higher off the overnight low at 1554 to finish up a few dollars on the day at 1570.

Overnight, gold has continued to recover from an extremely oversold position, though the market appears to be finding resistance around 1584.

The market will remain fragile and vulnerable to further declines in the short term and we want to see further evidence before we declare a bottom is in.

With oil selling off hard after making a "double top" at $98.65 and a bearish RSI divergence on the daily chart, together with the dollar rallying from key support, the headwinds to further short term gains in gold are strong.

However, the extremely oversold position will attract bargain hunters and a snap back rally is likely to occur in the next week or two.

Today's video looks at the price action of the last couple of days in more detail and what we evience we are looknig for to confirm that a bottom is in.

We commented yesterday in our online blog that if gold broke the lower boundary of the 5 month down trend, 1525-1550 came back into play.

Yesterday we saw relentless selling all day in gold, with the market dropping sharply on the break of the 1596 low from Friday and again dropping hard on the break of the lower trendline boundary at 1585.

The market eventually found support at 1558, though overnight has made a new low at 1554.

We are now very close to our 1525-1550 support zone and, with RSI on the daily and now weekly charts at historically low levels, we cannot see much more downside from here.

It is now apparent that gold is forming a major low, from which we believe a huge rally will unfold, targetting an initial high in June/July this year.

However, should 1525 be broken decisively to the downside, we will begin to consider that the bull market in gold is over and much lower prices ahead (1300 as a first port of call).  This scenario makes little sense when we consider the macro economic outlook, negative real interest rates and clear currency wars emerging around the world, and little sense from a technical perspective with gold so oversold.

After failing to better Monday's high of 1619, the weak recovery rally in gold has petered out, with the price falling below 1600 this morning.  The 1596 Friday low has also been broken and gold is again testing the lower boundary of the 5 month old down trend channel in the 1585-1590 area.

If gold cannot find support here, then 1550 and 1525 come back into play, however gold remains oversold on the RSI for all timeframes from daily down to 30 minutes.

The dollar continues to find strength, though the strong oil price is still not having any impact on the gold price at all.

If gold can find support at 1585-1590, the prospects of a recovery to 1625-1630 remain reasonable.

Today's video looks at some RSI divergences and our targets for a recovery rally.

In quiet trading yesterday due to the President's Day holiday in the US, gold stabilised above 1600, trading as high as 1619 and as low as 1607.

As we commented in our online blog yesterday, we expect gold to stage a recovery rally form here, though the market is fragile and the likelihood of further sell offs continues to be elevated.

Today should see a bit more action as the US participants return and the release of the FOMC minutes tomorrow evening is always closely watched for signs of how the Fed are thinking with regard to economic stimulus and interest rates.

As long as real interest rates (nominal rate less inflation) remain negative and economic stimulus remains active, gold will continue its 12 year old bull market.

Today's video looks at some key Fibonacci retracement levels and our targets for a recovery rally.

We commented in our online blog on Friday that gold looked set to test key support at 1625 and a break of that support would likely see a rapid drop to 1600.

This is exactly how things played out, with the market dropping dramatically once 1625 was taken out as a raft of sell stops were triggered.  The market eventually found support at the lower trendline at 1596, with gold deeply oversold on all time frames from the daily chart downwards.

This morning, gold has recovered slightly on the back of renewed physical demand out of China, as market participants return from a week long holiday.  The market has also seen bargain hunters seeing value in gold at these levels, with the daily RSI at a level that has seen recovery rallies in the past.

The danger of continued weakness cannot be ruled out, as the 1625 key support was decisively broken on Friday, however we consider a recovery rally to be the most likely outcome over the next few days.  The US markets are closed today for President's Day, so we will probably see very quiet trading for the rest of the day.

Today's video looks at where Friday's price action leaves the "big picture" and our targets for a bounce from here.

Gold bounced around within the "flat bottomed triangle" pattern for the early part of yesterday, before falling through the lower boundary of the triangle, as expected, in the afternoon.

Gold has continued to sell off overnight and this morning and looks set to test the key 1625 support level.  Should this level give way, a wave of stop losses will be triggered and gold will likely fall rapidly towards 1600.

The market has fallen steadily since breaking the triangle consolidation pattern on Monday and is now some 30 points lower on the week.  If gold closes the week at these levels, the weekly chart will show become distinctly bearish and with weekly RSI around 40, still has some potential for further falls.

Outside markets continue to have almost no influence on gold, as the market appears to be beating its own path steadily lower. 

Today's video looks at yesterday's price action in more detail and our strategy for our current trade.