INTERMEDIATE TERM TREND BEARISH
SHORT TERM TREND BEARISH
VERY SHORT TERM TREND BULLISH
In our last update, we said we were watching support at the 200 day Moving Average and that we suspected this level would hold, though there was likely to be another test before the price started to move higher into December.
Since then, gold briefly broke below the 200 day Moving Average, finding support at 1764 before rebounding sharply. The price is now approaching previous strong support at 1850 which will now act as initial resistance, however the December rally we have been predicting for months is clearly underway.
We think there is likely to be a correction or period of consolidation below 1850 before breaking through this level later in December. We expect the rally to continue well into the first quarter of 2021.
Gold is still trading below the 50 day Moving Average, currently at 1880, and the 89 day Moving Average, currently at 1911. These levels provide resistance in the short term. The price remains just above the 200 day Moving Average which is currently at 1803.
Equities continue to grind higher, fuelled by unprecedented amounts of financial stimulus and liquidity and record low interest rates and continue to make all time highs on a regular basis. As good news on vaccine development continues to arise on a regular basis, equities have pulled back a little but remain within striking distance of all time highs.
The Dow is currently at 29,823, just a few hundred points below the all time high of 30,214, and the S&P 500 is currently at 3,663, just 10 points below the all time high of 3,674 set on 9 November.
Oil prices have recovered strongly since testing $34 at the start of November and are now trading above $45 a barrel for the first time since March. The chart still looks very bullish and we expect oil prices to rally further over the coming months. Our initial target is $50 in the short term, with $55 the next target after that.
In gold, support can be found at 1825, 1810, 1800, 1790, 1765, 1750, 1715 and 1700. In the medium term, we still expect further gains in the gold price would suggest a move towards 2,100 early next year is likely.
Short term resistance can be found at 1850, 1889, 1900, 1920, 1965, 2000, 2016 and 2077. Gold needs to break the key resistance level around 1965 to give the bulls some renewed momentum and a move back towards the all time highs above 2000.