As talks progressed in relation to the debt ceiling in Washington, gold drifted lower yesterday after making a high at 1291 in early trading. This morning, gold has fallen sharply, crashing through Friday's low at 1261 and seemingly on its way to 1220-1225 in the first instance and likely a retest of 1180.
Certainly a resolution of the US budget crisis (and it is rapidly becoming a crisis) will see a relief rally in stocks and the dollar and further selling pressure in gold, with the almost perfect conditions for gold to prosper seeing only a muted response in the past few weeks.
Silver and oil are also weak, adding further to gold's woes, and the decisive break of the 61.8% retracement of the rally from 1180 to 1434 is a very bearish outcome.
Support can be found at 1250-1253, 1220-1225, 1200 and 1180 - a break of 1180 would be an extremely bearish development, suggesting a short term target of 1000-1050 and a possibility of a drop to 800.
Resistance can be found at 1290-1292, 1300-1305, 1322, 1330, 1353, 1375, 1400 and 1434. A break of 1434 would be a bullish development and suggest gold was on its way back above 1500.
Today's video for subscribers looks at the recent trading and the implications of the break of 1272 for gold.
Certainly a resolution of the US budget crisis (and it is rapidly becoming a crisis) will see a relief rally in stocks and the dollar and further selling pressure in gold, with the almost perfect conditions for gold to prosper seeing only a muted response in the past few weeks.
Silver and oil are also weak, adding further to gold's woes, and the decisive break of the 61.8% retracement of the rally from 1180 to 1434 is a very bearish outcome.
Support can be found at 1250-1253, 1220-1225, 1200 and 1180 - a break of 1180 would be an extremely bearish development, suggesting a short term target of 1000-1050 and a possibility of a drop to 800.
Resistance can be found at 1290-1292, 1300-1305, 1322, 1330, 1353, 1375, 1400 and 1434. A break of 1434 would be a bullish development and suggest gold was on its way back above 1500.
Today's video for subscribers looks at the recent trading and the implications of the break of 1272 for gold.