INTERMEDIATE TERM TREND: NEUTRAL
SHORT TERM TREND: BULLISH
VERY SHORT TERM TREND: NEUTRAL/BEARISH
Gold corrected back to the 38.2% retracement level at 1255 following a sharp impulsive rally in January from 1167 to 1307, before moving sharply higher. The price formed a “double top” at 1285 before reversing course again, forming a “double bottom” at 1255 which appears to be holding as the price is higher this morning.
It is likely that the correction is over, with the possibility of a final test of the 38.2% retracement or even the 50% retracement at 1239 following the release of the Non-Farm Payroll number on Friday. We expect higher prices in the short term.
Equities remain strong with indices near all time highs and any dips being seen as buying opportunities. Oil has surged 8% higher overnight after a protracted and devastating decline to below $44 a barrel, however it is far too early to call a bottom and the down trend remains firmly entrenched.
The dollar fell sharply yesterday from above 95 on the index, though is still relatively strong near 94.
Support can be found at 1255, 1245, 1222-1225, 1210, 1204, 1200, 1192, 1180-1183, 1175-1178, 1172, 1167, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000. Gold has bounced back after breaking below the critical 1180 level and is now moving higher after a classic "bear trap". The break of the intermediate down trend suggests a new rally phase is just beginning.
Resistance can be found at 1271-1273, 1278, 1282-1284, 1290-1292, 1300-1302, 1305, 1310-1312, 1322-1325, 1333-1335 and 1345. The break of the intermediate down trend line in an impulsive move higher suggests an end to the down trend and the start of a new rally leg in gold.
Today's video for subscribers looks at the recent trading in more detail and our strategy for today's trading session.