Gold has potentially completed an "ABC-X-ABC" correction and started a new wave higher, though there is significant resistance above and a surging dollar may yet cap gold's advance. We must also keep an eye on equities, as we maintain our stance that we need a meaningful correction in stocks to see a strong rally in gold.
Gold has bounced off the 61.8% retracement level at 1280 and looks primed to rally towards 1325 in the first instance.
Support can be found at 1302-1305, 295-1297, 1286, 1280, 1274, 1263, 1257-1260, 1250-1252, 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 - a failure to break the 65 week MA has made this scenario much more likely.
Resistance can be found at 1310, 1318-1322, 1325-1326, 1333-1335, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. We appear to be witnessing a second failure to break through the key 65 week MA - this would suggest that the intermediate down trend is intact and a retest of 1240 and possibly 1180 is likely.
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