This morning, gold has opened lower and is currently trading around 1378.
The triangle consolidation is clear on the daily chart and we expect a resolution to the downside, as triangles most often break in the direction of the prevailing trend which is currently down in gold.
Unless or until the price moves back above 1525, we remain bearish on gold and expect to see significant declines this summer. However, the speculative short position is extremely high - when the market turns upwards from a final bottom, an explosive short covering rally should see gold power higher in a very short period of time.
We are confident that a bottom is not yet in and expect to see gold trade below 1300 in the near future, with a chance of a spike sell off as low as 1150, or even 1050. This spike lower would present an excellent long trade opportunity.
Equities are moving higher, which may explain some of the weakness in gold, whilst the dollar has stopped falling and is attempting to move higher from support around 80.70.
Oil briefly broke above key resistance at 98.25 yesterday, though has since fallen back a little. A break higher should see a strong rally develop in oil which may help gold a little.
Today's video for subscribers looks at the triangle consolidation and our strategy for our current trade.