LONG TERM TREND                           BEARISH
INTERMEDIATE TERM TREND             NEUTRAL
SHORT TERM TREND                          BULLISH
VERY SHORT TERM TREND                 BEARISH

Since our last update, gold has broken out of the narrow trading range between 1181 and 1212 that contained the price during September.  On 11 October, gold powered higher, smashing through the top of the trading range, moving as high as 1243 and has stayed above 1215 since then.

In our last update, we stated that our view was that the downside presents the most likely path into year end, though a break above 1216 would suggest that a short term low has been made in gold.  As we have now had this break above 1216 and a number of successful retests of the top of the previous trading range, we are likely to see gold rally towards the high 1200s into the year end.  However, a reversal and break below 1212 would suggest another test of 1180 - if this level were to fail, a swift return to the low 1100s would be likely in the short term.

Gold is now trading above both the 50 day Moving Average, currently at 1205, and the 89 day Moving Average, currently at 1214. The 50 day moving Average has curled upwards in a bullish posture, however the price remains below the 200 day Moving Average at 1272.

After making an all time high at the time of our last update, equities have corrected sharply, with the Dow down over 2,000 points from the highs and the S&P 500 falling 300 points.

The Dow is currently at 24,700, over 2,000 points below the all time high of 26,967, with the S&P 500 currently at 2,665, almost 300 points lower than the all time high of 2,941.

Following equities, oil has sold off sharply and is currently trading around $66 a barrel, over $10 lower than the recent highs around $77 a barrel, moving in lock step with equities.

Support can be found at 1220, 1215, 1209, 1201, 1192, 1182, 1172, 1160, 1145, 1122, 1100, 1072 and 1045.  The recent sell off is bearish for gold in the long term timeframe and suggests a move towards the 2015 lows at 1045 is becoming more likely.

Short term resistance can be found at 1233, 1243, 1265, 1273, 1278, 1284, 1292, 1302 and 1310.  Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.

LONG TERM TREND                            BEARISH
INTERMEDIATE TERM TREND              NEUTRAL
SHORT TERM TREND                          NEUTRAL
VERY SHORT TERM TREND                 NEUTRAL

Since our last update, gold has continued to trade within a relatively tight range between 1181 and 1212.  In our last update we suggested that there were several signs of weakness inherent in the gold market and that a retest of support at 1182 was a probable outcome in the short term.

Gold did indeed retest 1182 - the low being 1181 - and since then has bounced back up towards the top of the trading range just above 1200.  It is still in the balance as to where gold goes next – the bulls will see the ability of the market to hold 1180 in the short term as positive, whilst the bears will equally validly see the inability of gold to bounce in any meaningful way after a sharp decline from the mid-1300s to 1160 as indicative of further declines to come.

We remain of the view that the downside presents the most likely path into year end, though a break above 1216 would suggest that a short term low has been made in gold.  A break below 1180 would suggest another test of 1160 - if this level were to fail, a swift return to the low 1100s would be likely in the short term.

Gold has recently broken above the 50 day Moving Average, currently at 1200 - though not convincingly - and remains below the 200 day Moving Average at 1281 and the 89 day Moving Average at 1226.

We have stated several times in our previous reports that support for equities remains strong and we expected new all time highs later this year.  After making yet another all time high this week, the Dow has consolidated just above 26,600, with the S&P 500 taking stock just above the 2,900 level.

The Dow is currently at 26,660, just below the all time high of 26,967, with the S&P 500 currently at 2,905, just shy of the all time high of 2,941.

Oil has resumed its powerful rally, found short term resistance just below $77 a barrel and has retraced slightly to currently trading around $74.50 a barrel.

Support can be found at 1195, 1192, 1189, 1182, 1172, 1160, 1145, 1122, 1100, 1072 and 1045.  The recent sell off is bearish for gold in the long term timeframe and suggests a move towards the 2015 lows at 1045 is becoming more likely.
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Short term resistance can be found at 1207, 1214, 1218, 1233, 1265, 1273, 1278, 1284, 1292, 1302 and 1310.  Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.