INTERMEDIATE TERM TREND: NEUTRAL
SHORT TERM TREND: NEUTRAL
VERY SHORT TERM TREND: BEARISH
The correction in gold since the 22 January high has continued this week, with the price retracing 61.8% of the rally. The low of 1216 was just below this key support area, however the price quickly rallied back above the closely watched retracement level.
If gold continues to decline next week it would suggest a return to the sub-1200 prices we saw at the end of last year and would be a blow to the bulls who have high hopes following the strong rally in January. The bulls will be looking to defend this level and move higher again, with a break of 1240 confirming that the rally is intact.
Equities remain near all time highs, oil is attempting to move higher after bouncing off $44 a barrel and the dollar is correcting after a strong rally that took the index well above 95 and to multi-year highs.
Support can be found at 1222-1225, 1217, 1204, 1200, 1192, 1180-1183, 1175-1178, 1167, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000. Gold has bounced back after breaking below the critical 1180 level and is now moving higher after a classic "bear trap". The break of the intermediate down trend suggests a new rally phase is just beginning.
Resistance can be found at 1231-1233, 1240, 1246, 1252-1256, 1271-1273, 1278, 1282-1284, 1290-1292, 1300-1302, 1305, 1310-1312, 1322-1325, 1333-1335 and 1345. The break of the intermediate down trend line in an impulsive move higher suggests an end to the down trend and the start of a new rally leg in gold.
Today's video for subscribers looks at the recent trading in more detail and our strategy for today's trading session.