Gold finally found support at 1285 on Friday after sustained selling all week, with the 50% retracement and trend line providing enough of a signal for buyers to step in and form a bullish "hammer" candlestick on the daily chart. There is a clear reverse "head and shoulders" pattern evident on the 4 hour chart that suggests higher prices in the near term.
Gold is currently trading right on the 200 DMA - the bulls will be watching this line closely, a decisive break of which would put the bullish case in doubt. We expect the 200 DMA to provide support and the price of gold to move back above 1300 this week.
Equities remain strong and near all time highs, though as we noted last week there is a clear line of resistance around 1880 on the S&P 500. Oil is now well above $100 a barrel again after last month's sharp dip and the dollar is holding strong above 80 - these are all negative factors for gold, though we are in a historically strong seasonal period for the yellow metal.
Support can be found at 1285-1290, 1280, 1275, 1250-1255, 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, though this now looks unlikely unless we break below 1250.
Resistance can be found at 1298-1300, 1307, 1318-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. The impulsive breakout above the down trend line on the weekly chart suggests an end to the intermediate term down trend and that a significant rally is now developing.
Today's video for subscribers looks at the recent trading in more detail and our thoughts on gold's trading this week.
Gold is currently trading right on the 200 DMA - the bulls will be watching this line closely, a decisive break of which would put the bullish case in doubt. We expect the 200 DMA to provide support and the price of gold to move back above 1300 this week.
Equities remain strong and near all time highs, though as we noted last week there is a clear line of resistance around 1880 on the S&P 500. Oil is now well above $100 a barrel again after last month's sharp dip and the dollar is holding strong above 80 - these are all negative factors for gold, though we are in a historically strong seasonal period for the yellow metal.
Support can be found at 1285-1290, 1280, 1275, 1250-1255, 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, though this now looks unlikely unless we break below 1250.
Resistance can be found at 1298-1300, 1307, 1318-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. The impulsive breakout above the down trend line on the weekly chart suggests an end to the intermediate term down trend and that a significant rally is now developing.
Today's video for subscribers looks at the recent trading in more detail and our thoughts on gold's trading this week.