A break below 1272 would suggest a return to 1180 and possibly even lower prices - the bulls have their work cut out to reverse this down trend, only a move above 1360 will suggest the decline has been halted.
Equities continue to attract investors in search of yield and we see no sign of equity markets making a top here - we expect many months of further gains before a top is put in place. Consequently, we can't see gold rallying strongly in the face of such equity strength and in an environment with benign inflation and rising interest rates.
The dollar remains weak and this is likely limiting the losses in gold - however a strong dollar rally would really put the pressure on and see gold tumble.
This week there is little in the way of news to excite the markets and we therefore expect a continuation of the down trend and lower gold prices.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current trade.