After surging as high as the key level of 1322 on Thursday, gold consolidated near resistance levels on Friday and this morning, suggesting that another leg higher is approaching.
The triangle consolidation around 1315 is a bullish formation and a strong move higher would have significant long term consequences for gold - the yellow metal is on the verge of breaking the long term down trend line and the 65 week MA.
This would suggest a return to the intermediate term bull market and should see much higher prices. However, the last attempt by gold to break through the 65 week MA was unsuccessful and was followed by a sharp and sustained sell off that saw gold fall $150 in the following 3 months.
Equities remain near all time highs and the dollar is still above 80 despite the recent sell off, whilst oil remains elevated at $107 a barrel. Interestingly, gold appears to have taken charge of its own destiny somewhat recently, with the influence of outside markets fading.
Support can be found at 1310, 1306, 1300, 1289, 1285, 1263, 1257-1260, 1250-1252, 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 - the break below 1250 seems to have been invalidated, indicating that a return to 1180 is significantly less likely.
Resistance can be found at 1319-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. We are now testing the key 65 week MA - a break of this level would suggest that the intermediate down trend was at an end.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.
The triangle consolidation around 1315 is a bullish formation and a strong move higher would have significant long term consequences for gold - the yellow metal is on the verge of breaking the long term down trend line and the 65 week MA.
This would suggest a return to the intermediate term bull market and should see much higher prices. However, the last attempt by gold to break through the 65 week MA was unsuccessful and was followed by a sharp and sustained sell off that saw gold fall $150 in the following 3 months.
Equities remain near all time highs and the dollar is still above 80 despite the recent sell off, whilst oil remains elevated at $107 a barrel. Interestingly, gold appears to have taken charge of its own destiny somewhat recently, with the influence of outside markets fading.
Support can be found at 1310, 1306, 1300, 1289, 1285, 1263, 1257-1260, 1250-1252, 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 - the break below 1250 seems to have been invalidated, indicating that a return to 1180 is significantly less likely.
Resistance can be found at 1319-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. We are now testing the key 65 week MA - a break of this level would suggest that the intermediate down trend was at an end.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.