Gold drifted lower for most of the day yesterday, making a low of 1404 in the New York session before finding support and moving higher. The price has climbed steadily overnight, in line with other commodities, and is currently trading around 1425.
It is interesting to note that gold is currently trading more like a commodity than a "safe haven" asset, moving up and down in line with oil, equities and the industrial meta.
We maintain that the rally from the lows last week at 1322 is corrective in nature rather than impulsive, so can be viewed as a "dead cat bounce" rather than a strong bullish recovery.
Only a break above 1525 will change our view - the technical damage done last week by the massive plunge on phenomenally high volume cannot be overemphasised. For the bullish case to remain alive, the market needs to rapidly bounce back above 1525, thereby confirming the spike down as a final washout low before the next leg of the bull market begins.
Whilst many online commentators have taken this stance, the strength and structure of the rebound so far does not suggest to us that this is the correct view to take.
Today's video for subscribers looks at the trading of the past week and our targets for this corrective rally.
It is interesting to note that gold is currently trading more like a commodity than a "safe haven" asset, moving up and down in line with oil, equities and the industrial meta.
We maintain that the rally from the lows last week at 1322 is corrective in nature rather than impulsive, so can be viewed as a "dead cat bounce" rather than a strong bullish recovery.
Only a break above 1525 will change our view - the technical damage done last week by the massive plunge on phenomenally high volume cannot be overemphasised. For the bullish case to remain alive, the market needs to rapidly bounce back above 1525, thereby confirming the spike down as a final washout low before the next leg of the bull market begins.
Whilst many online commentators have taken this stance, the strength and structure of the rebound so far does not suggest to us that this is the correct view to take.
Today's video for subscribers looks at the trading of the past week and our targets for this corrective rally.