The move higher in gold is being aided by a weaker dollar, now trading near 80 after failing to hold onto the key 81 level last month. Oil is rebounding strongly from oversold levels, though any rally in gold is likely to be capped unless equities correct in a meaningful way, which looks unlikely at this time.
As we move towards the end of 2013, it is now clear that gold is going to post its first loss in 13 years - the question on all traders lips is "is this a correction in a bull trend or the end of the bull market?".
Of course only time will tell, though the current environment does not suggest a triumphant return for the bulls next year - rising interest rates and economic activity, a (relatively) subdued geopolitical environment, virtually no inflation and rising equities all point to weak demand for gold and another difficult year next year.
Support can be found at 1240, 1235, 1223-1227, 1217, 1212, 1200-1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1250, 1260, 1270, 1277-1280 and 1291-1295. A break above 1260 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at the recent trading and our strategy for our next trade.