Gold moved steadily higher for most of the day yesterday, again finding resistance at 1400 and backing off from that key level twice in the afternoon session.
It is clear that, whilst gold remains in a well established and strong downtrend, the market is attempting to form a base and start a new uptrend following the low at 1338 on 19 May.
If gold can rise from here, taking out 1400 and 1414 as initial targets, the prospect of a "double bottom" increases, however it will take a move above strong resistance at 1475-1485 to confirm this "double bottom" is valid.
The strength and influence of the downtrend cannot be underestimated and we remain bearish as long as gold is below 1525. A move above this level will see us move to a neutral stance, with a break of 1800 required for us to move back to an all out bullish positioning.
It will be a long, hard road for gold back from here, though the huge open short interest is potentially the fuel required to sustain a major rally if the market can start to move higher from here and find a spark to reverse the trend.
We continue to maintain our stance that a major rally in gold will not commence until equities correct significantly - whilst it is far too early to call a top in stocks, the big sell off yesterday was a warning sign and a reminder that nothing goes up forever.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.
It is clear that, whilst gold remains in a well established and strong downtrend, the market is attempting to form a base and start a new uptrend following the low at 1338 on 19 May.
If gold can rise from here, taking out 1400 and 1414 as initial targets, the prospect of a "double bottom" increases, however it will take a move above strong resistance at 1475-1485 to confirm this "double bottom" is valid.
The strength and influence of the downtrend cannot be underestimated and we remain bearish as long as gold is below 1525. A move above this level will see us move to a neutral stance, with a break of 1800 required for us to move back to an all out bullish positioning.
It will be a long, hard road for gold back from here, though the huge open short interest is potentially the fuel required to sustain a major rally if the market can start to move higher from here and find a spark to reverse the trend.
We continue to maintain our stance that a major rally in gold will not commence until equities correct significantly - whilst it is far too early to call a top in stocks, the big sell off yesterday was a warning sign and a reminder that nothing goes up forever.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.