We noted yesterday that gold looked like it was trying to form a "double bottom" at 1211 and attempting to move higher - this turned out to be correct as gold surged through resistance at 1250-1260, breaking out of the down trend channel and moving as high as 1268 before finding resistance and falling back to close around 1261.
This morning, gold is holding the 1250-1255 area that is now acting as support, though has not yet managed to build on yesterday's strong gains.
The dollar weakness is persisting, which is aiding gold's rally, whilst a resurgent oil price is also adding to the bullish mood in gold. We continue to believe that a major rally in gold will not begin until equities correct substantially, though we expect a short term rally to unfold here.
Support can be found at 1250-1255, 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 1268-1270, 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 our targets for this rally and our strategy for our next trade.
This morning, gold is holding the 1250-1255 area that is now acting as support, though has not yet managed to build on yesterday's strong gains.
The dollar weakness is persisting, which is aiding gold's rally, whilst a resurgent oil price is also adding to the bullish mood in gold. We continue to believe that a major rally in gold will not begin until equities correct substantially, though we expect a short term rally to unfold here.
Support can be found at 1250-1255, 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 1268-1270, 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 our targets for this rally and our strategy for our next trade.