Friday's trading saw gold oscillate in a narrow range, forming a "doji" candlestick on the daily chart that signifies hesitation in the market - the bulls appear to have lost their momentum in the face of strong resistance at the 65 week MA and the long term down trend line, whilst the bears have not yet been able to attract enough support to force the price back below 1300.
This week could be a crticial one for gold with the price at such an important juncture and the participants finely balanced. We suspect the bears will win out, as the odds favour a continuation of the well established down trend - a failure to break the 65 week MA will probably see a strong decline as bulls throw the towel in and new shorts take advantage of the market vulnerability.
Equities remain well supported and are near to all time highs, the dollar has fallen back to strong support at 80 and oil has given back some of its recent gains but is still trading above $105 a barrel. We maintain our stance that gold will not enjoy a major rally until equities correct significantly.
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 now less likely.
Resistance can be found at 1318-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and
1435. We are now attempting to break the key 65 week MA - a break of this level would suggest that the intermediate down trend was at an end and higher prices are ahead.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.
This week could be a crticial one for gold with the price at such an important juncture and the participants finely balanced. We suspect the bears will win out, as the odds favour a continuation of the well established down trend - a failure to break the 65 week MA will probably see a strong decline as bulls throw the towel in and new shorts take advantage of the market vulnerability.
Equities remain well supported and are near to all time highs, the dollar has fallen back to strong support at 80 and oil has given back some of its recent gains but is still trading above $105 a barrel. We maintain our stance that gold will not enjoy a major rally until equities correct significantly.
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 now less likely.
Resistance can be found at 1318-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and
1435. We are now attempting to break the key 65 week MA - a break of this level would suggest that the intermediate down trend was at an end and higher prices are ahead.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.