INTERMEDIATE TERM TREND BEARISH
SHORT TERM TREND BEARISH
VERY SHORT TERM TREND BEARISH
Gold ran into solid resistance at the 200 day MA at 1263 last week and has spent the past 9 trading sessions selling off steadily, following some strong economic data and a rising likelihood, now near certain, of a US rate hike in March.
This, coupled with the fact that other major currencies are far from commencing the tightening cycle has meant that the dollar has surged and the approach of the end of gold’s traditional seasonal strong start to the year has also seen gold under pressure.
Gold is in danger of dropping back toward support at 1180, particularly if we see a strong NFP jobs report tomorrow.
Gold is now back below all the major daily moving averages (20,50 and 200) and until gold can break the long term down trend line, last tested after the US election result and unbroken for 6 years, we remain bearish for gold in the intermediate and long term timeframes. This line is currently at approximately 1292 and moving slowly lower.
The gold chart still looks very similar to last year and we would therefore expect a top to be put in place this month – as it stands it appears that the top has been put in at 1263.
Equities have corrected a little in recent trading sessions after becoming very overextended, with the Dow now back at 20,880 and the S&P at 2,365 after surging to new all time highs last week.
Oil has corrected sharply in the last few sessions and is now back below $50 a barrel after rebounding strongly from the 2016 lows below $30 a barrel.
Support can be found at 1203, 1198, 1180, 1172, 1160, 1145, 1122, 1100, 1072 and 1045. The recent sell off and yet another rejection of the long term down trend line is bearish for gold in the long term timeframe and suggests a move towards the 2016 lows is likely, unless gold can break above the 2011 down trend line.
Resistance can be found at 1216-1220, 1225, 1244-1246, 1263, 1280 and 1298-1300. Gold needs to break the key resistance level at 1298-1300 to give the bulls some momentum and long term control.