Gold has made a solid start to 2014, rising sharply after testing key support at 1180 on New Years' Eve to currently trade around 1230, well above the 20 DMA and 200 hour MA.
The downtrend that has been the dominant market force in gold since October remains intact and we expect another test of 1180 in the first month of this year. It is our expectation that the 1180 level will be breached on this test and gold will go on to test the major multi year support level at 1000-1050 in the first quarter of 2014.
Equities continue to surge higher and there are no signs of a top forming, whilst the dollar has woken from its slumber and is moving back towards 81, a key level for the dollar.
The market action next week will be instructive, as traders return to their desks after a long holiday period and volumes return to normal, though for now we expect any rallies in gold to be snapped up as shorting opportunities.
Support can be found at 1220-1225, 1214, 1210, 1200, 1190, 1188 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1237-1240, 1245, 1250-1255, 1268-1270, 1277-1280 and 1291-1295. A break above 1268 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at the recent trading action and our strategy for our next trade.
The downtrend that has been the dominant market force in gold since October remains intact and we expect another test of 1180 in the first month of this year. It is our expectation that the 1180 level will be breached on this test and gold will go on to test the major multi year support level at 1000-1050 in the first quarter of 2014.
Equities continue to surge higher and there are no signs of a top forming, whilst the dollar has woken from its slumber and is moving back towards 81, a key level for the dollar.
The market action next week will be instructive, as traders return to their desks after a long holiday period and volumes return to normal, though for now we expect any rallies in gold to be snapped up as shorting opportunities.
Support can be found at 1220-1225, 1214, 1210, 1200, 1190, 1188 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1237-1240, 1245, 1250-1255, 1268-1270, 1277-1280 and 1291-1295. A break above 1268 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at the recent trading action and our strategy for our next trade.