INTERMEDIATE TERM TREND: BEARISH/NEUTRAL
SHORT TERM TREND: NEUTRAL
VERY SHORT TERM TREND: NEUTRAL
After a choppy end to 2014, as we enter the new year gold is trading just below the 1200 level within a wider trading range between 1167 and 1214. We are watching this range for an indication of the next move, with a break below 1167 suggesting further declines and a break above 1214 indicative of a new rally phase.
We should see a clearer pattern emerge this week as traders return to their desks after the Christmas break and volumes increase accordingly. The trading themes of 2014 appear to be continuing, with the dollar hitting 9 year highs around 91.50, oil tumbling towards $50 per barrel and equities remaining near all time highs.
As we have repeated many times before, this environment is not conducive to higher gold prices and we expect a move towards our long held target of 1000 early in 2015.
Support can be found at 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 appears to be trying to build a base to move higher in what would be a classic "bear trap". However, the rally has so far been choppy and corrective in nature, suggesting a retest of 1131 is likely in due course.
Resistance can be found at 1198, 1203, 1207, 1213, 1222-1223, 1235-1238, 1250, 1255, 1263, 1271-1273, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335 and 1345. A third failure to break the down trend line on the weekly chart confirms that the intermediate down trend is intact, however the recent trading suggests the bulls may be building a base for a rally.
Today's video for subscribers looks at the recent trading in more detail and our strategy for today's trading session.