INTERMEDIATE TERM TREND: BEARISH
SHORT TERM TREND: NEUTRAL/BEARISH
VERY SHORT TERM TREND: BULLISH
Gold had another positive week last week, trading as high as 1207 and testing both the 61.8% retracement of the recent decline and the 50 DMA. The rally has been choppy and overlapping and is likely to be corrective in nature rather than the beginning of a new bull run - with the price finding resistance at the confluence of the 50 DMA and 61.8% Fib level, we would not be surprised to see the decline resume from here.
The dollar continues to power higher alongside equities, with oil remaining weak - inflation expectations are at rock bottom with the gradually recovering world economy signalling interest rate rises next year. This combination is very bearish for gold and there appears to be little reason to buy gold at these levels.
Support can be found at 1193, 1180-1183, 1175-1178, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000 . The break of 1180 has serious bearish implications for gold and suggests a decline to 1000-1050 in the short term, unless gold can hold above this level and build a base to move higher.
Resistance can be found at 1205, 1208, 1222, 1225, 1235, 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 and the break of 1180 suggests the bears are in full control.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current short position.