INTERMEDIATE TERM TREND BEARISH
SHORT TERM TREND BULLISH
VERY SHORT TERM TREND BEARISH
Gold has again found strong resistance at the long term down trend line around 1290 after a strong rally took the price from below 1200 to a high of 1295 during March and April. Since failing to break the crucial 2011 down trend line, gold has fallen by $30 and is currently trading around 1267.
Gold appears to be accelerating to the downside, however this year any corrections have been short and seen as buying opportunities. It is clear that the bears are doing all they can to defend the down trend line, as a break above 1300 would see a sharp rally towards 1400 and beyond and a change in the intermediate trend to bullish.
So far, the bears have retained control and with options expiry this week, we could see the price pinned to the round number 1250.
Gold is now back below the 20 day moving average, though it remains above the 50 and 200 day moving averages for now. Until gold can break the long term down trend line that has now remained unbroken for 6 years, we will still be overall bearish for gold in the intermediate and long term timeframes. This line is currently at approximately 1288 and moving slowly lower.
Equities have bounced back sharply in recent trading sessions after a shallow correction, with the Dow back at 21,000 and the S&P at 2,385. Oil has corrected sharply in the last few sessions and is now back below $50 a barrel.
Support can be found at 1265, 1260, 1244-1247, 1226, 1216, 1195, 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 1278-1279, 1288 and 1292-1295. Gold needs to break the key resistance level around 1295 to give the bulls some momentum and long term control.