After failing to breach the 1338-1340 resistance area yesterday and with declining momentum, gold drifted lower for the rest of the day, closing near the lows at 1323.
This morning, gold is again on the defensive and looks likely to retest key support at 1307. A break of this level opens up a decline towards 1272, with 1292 the only support before this level. A break of resistance at 1338-1340 would see gold move up towards the upper boundary of the down trend channel, currently at 1354.
Oil continues to exhibit weakness, as the Syrian "risk premium" has now fully unwound and a test of $100 looks likely. The weakness in the dollar is providing some support to gold, though the inability of the yellow metal to rally in the face of such dollar softness, during the strongest month of the year historically, is a concern for the bulls.
We consider the main negative factor for gold at the moment to be continued equity market strength - funds are being reallocated out of gold and into equities as investors chase yield and until equities correct in a significant way, gold will find few reasons to rally.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current trade.
This morning, gold is again on the defensive and looks likely to retest key support at 1307. A break of this level opens up a decline towards 1272, with 1292 the only support before this level. A break of resistance at 1338-1340 would see gold move up towards the upper boundary of the down trend channel, currently at 1354.
Oil continues to exhibit weakness, as the Syrian "risk premium" has now fully unwound and a test of $100 looks likely. The weakness in the dollar is providing some support to gold, though the inability of the yellow metal to rally in the face of such dollar softness, during the strongest month of the year historically, is a concern for the bulls.
We consider the main negative factor for gold at the moment to be continued equity market strength - funds are being reallocated out of gold and into equities as investors chase yield and until equities correct in a significant way, gold will find few reasons to rally.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current trade.