It is possible that correction is over with that test of an important support level and the rally will now resume, though we suspect that there is another test of 1300 to come first. Either way, gold appears to be back in full bullish mode, with a powerful new rally leg just underway.
The dollar is still languishing around 80, oil is holding ground above $102 and equities are well off the recent highs after correcting sharply last month.
Support can be found at 1312-1315, 1307, 1295-1300, 1280, 1275, 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 is looking increasingly unlikely.
Resistance can be found at 1325-1330, 1340, 1350, 1360, 1377-1380, 1395-1400, 1420 and 1435. The breakout above 1300 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 recent trading in more detail and our targets for the next rally leg in gold.