The market rallied impressively after this, closing above 1300 and the 200 DMA, thus giving the bulls some hope that the decline was a one off event. Overnight, gold retreated below 1300 however as London trading opened, gold has rallied and is trading above 1300 again.
Today is a critical day for gold - the bulls have been rattled and must step up to the plate with some follow through buying to confirm that the decline was a "flash in the pan", with the first target the 200 hour MA at 1309, whilst the bears will defend the overnight 1304 resistance level and look to maintain the downward momentum.
Equities have rallied sharply, as has oil, though the dollar remains weak. This dollar weakness is likely supporting gold above 1300 and will be key to the performance of the yellow metal in the next few trading sessions.
Support can be found at 1293, 1283, 1277-1280, 1250-1255, 1237-1240, 1220-1225, 1210, 1200 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term, though this now looks unlikely unless we break below 1250.
Resistance can be found at 1304, 1314-1315, 1320-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. The impulsive breakout above the down trend line on the weekly chart suggests an end to the intermediate term down trend and that a significant rally is now developing.
Today's video for subscribers looks at the implications of yesterday's trading in more detail and some key levels to watch.