INTERMEDIATE TERM TREND: BEARISH/NEUTRAL
SHORT TERM TREND: NEUTRAL
VERY SHORT TERM TREND: BEARISH
The "bull flag" pattern that appeared to be forming earlier in the week broke down on Monday in spectacular fashion, with gold tumbling as low as 1190 before finding support.
Yesterday, gold took traders on a wild ride, as Russian currency difficulties resulting from economic sanctions and a plunging oil price provided high levels of volatility to all sorts of markets. At one point gold was trading as high as 1223 before tumbling to 1187 following a surge in equity markets, eventually closing at 1197.
The short term price direction is unclear, with both bulls and bears seeing reasons to be hopeful, however the choppy nature of the recent rally and another rejection of the long term down trend line on the weekly chart suggests to us that the bears remain in the driving seat.
However, there are also some signs that a bottom has been put in at 1131 with the break below 1180 a classic "bear trap" - a break above 1220 would confirm the bullish case as the more likely outcome whilst a break below 1180 would suggest the bears remain in control.
Support can be found at 1191, 1187, 1180-1183, 1175-1178, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000 . Gold has bounced back and appears to be building a base to move higher after breaching the critical 1180 level, in what looks to be a classic "bear trap".
Resistance can be found at 1207, 1222-1223, 1235-1238, 1250, 1255, 1263, 1271-1273, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335 and 1345. A second failure to break through the key 65 week MA confirms that the intermediate down trend is intact however the recent trading suggests the bulls may be building a base for a rally.
Today's video for subscribers looks at the recent trading in more detail and our strategy for today's trading session.