After plunging to lows of 1338 in overnight trading on Sunday, gold recovered a little during the London session before thrusting $40 higher without warning or obvious catalyst in the afternoon session, touching 1400 briefly before backing off.
Gold held onto the gains overnight and is currently trading around 1390. The action yesterday formed a "bullish engulfing" candlestick on the daily chart, a reliable and powerful reversal pattern.
This suggests a short term bottom may be in and we are likely to see a rally of some sort over the next few sessions. If, and its a big if, gold can move significantly higher from here and break above 1487, a "double bottom" would be confirmed with the 15 April low - however, the market is a long way from there and for now we maintain our overall bearish stance with further price declines expected.
Oil has moved back up to the resistance area around $97-98 - a move above here would suggest a rally to well over $100 a barrel. However, another failure to break this resistance area would see prices tumble back towards the bottom of the current range at $92-93.
The dollar is consolidating at the key 84 level and has so far failed to break decisively above it - whether it does will influence the future direction of gold to a large extent.
Today's video for subscribers looks at the impact of yesterday's price surge in more detail and our strategy for our next trade.
Gold held onto the gains overnight and is currently trading around 1390. The action yesterday formed a "bullish engulfing" candlestick on the daily chart, a reliable and powerful reversal pattern.
This suggests a short term bottom may be in and we are likely to see a rally of some sort over the next few sessions. If, and its a big if, gold can move significantly higher from here and break above 1487, a "double bottom" would be confirmed with the 15 April low - however, the market is a long way from there and for now we maintain our overall bearish stance with further price declines expected.
Oil has moved back up to the resistance area around $97-98 - a move above here would suggest a rally to well over $100 a barrel. However, another failure to break this resistance area would see prices tumble back towards the bottom of the current range at $92-93.
The dollar is consolidating at the key 84 level and has so far failed to break decisively above it - whether it does will influence the future direction of gold to a large extent.
Today's video for subscribers looks at the impact of yesterday's price surge in more detail and our strategy for our next trade.