INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND NEUTRAL
VERY SHORT TERM TREND BEARISH
In our last update in January, we stated that a break of the upper boundary of the triangle at 1295 would likely see a rise to 1315-1320 in the first instance, with an extended rally towards and beyond 1350 a distinct possibility. Gold did break out of the triangle and proceeded to rally throughout the rest of January and February, making a top at 1346 on 20 February.
Since the February top, gold has corrected back to 1280, before moving higher again into a “lower high” of 1323. This large consolidation pattern suggests further upside towards and beyond 1365 in the medium term. A break below 1280 would suggest a return to the 200 day MA at 1248.
Gold is now trading below the 50 day Moving Average, currently at 1308, though the price remains above the 89 day Moving Average, currently at 1287. This level is providing support in the short term. The price remains well above the 200 day Moving Average which is currently at 1248.
After making an all time high at the start of October, equities have corrected in a volatile and choppy zig zag pattern, with the Dow falling as low as 21,600 before finding support. Since then the Dow has powered higher and is currently at 25,815, just 4% below the all time high of 26,967, and the S&P 500 is currently at 2,826, also just 4% lower than the all time high of 2,941.
Following equities, oil sold off sharply in the final quarter of 2018, at one point trading as low as $42 a barrel, over 45% lower than the 2018 highs around $77 a barrel. This dramatic sell off has been reversed to some extent with a strong 2019 rally taking the price back up to $60 a barrel.
Support can be found at 1287, 1280, 1276, 1265, 1250, 1244, 1228, 1216, 1210, 1201, 1196, 1192, 1182, 1172, 1160, 1145, 1122, 1100, 1072 and 1045. The recent consolidation patterns is bullish for gold in the medium term time frame and suggests a move towards resistance at 1365 later in the year is becoming more likely.
Short term resistance can be found at 1300-1302, 1305, 1310-1312, 1316-1320, 1325-1327, 1333, 1346, 1355-65. Gold needs to break the key resistance level around 1360 to give the bulls some momentum and long term control.