INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND BEARISH
VERY SHORT TERM TREND BEARISH
After failing to break key resistance around 1360 on five or six occasions during the last year, gold has steadily sold off since the final attempt to breach 1360 in April 2018.
The gold price is currently just above 1260 after testing channel support at 1255 earlier today. The price is well below all of the major moving averages which are all pointed lower.
We feel that it is likely that the sell off in gold is likely near an end and a bounce towards 1300 is likely to begin from around the 1255 area. However, gold could easily continue to sell off into the low 1200s, with the previous lows at 1236 and 1204 on the radar. A break below 1200 should see a rapid decline back towards the low 1100s, however at this stage we find this an unlikely scenario.
Equities remain in a corrective triangle pattern after making all time highs in January. The equity market has changed from a “buy the dips” to a “sell the rallies" mentality, however there remains good support and we expect the rally to resume later in the year with new all time highs likely. The Dow is currently at 24300, some 2,400 points off the all time high, with the S&P 500 currently at 2,700, approximately 150 points off the January highs.
The strong rally in oil continues after the dramatic sell off in May and June 2017 that saw a low of $42 a barrel, with the price of a barrel of oil now trading near $69.
Support can be found at 1255, 1236, 1214, 1204, 1194, 1180, 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 time frame and suggests a move towards the 2017 lows at 1204 is likely.
Short term resistance can be found at 1272, 1278, 1284, 1292, 1300 and 1308. Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.