INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND BULLISH
VERY SHORT TERM TREND BULLISH
Since our last update where we observed that gold had broken out of the narrow trading range that contained the price during September and had remained above 1215 since the breakout.
We also stated that as we had a break above 1216 and a successful retest, we were likely to see gold rally towards the high 1200s into the year end. Since then gold retraced as far as 1197 before rallying strongly back above 1215 again and has continued to move steadily higher since then. The price is currently at 1237, after finding resistance at the downtrend resistance line at 1241.
Gold is now trading above both the 50 day Moving Average, currently at 1218, and the 89 day Moving Average, currently at 1209. The 50 day Moving Average has continued to rise in a bullish posture and the 89 day Moving Average is also turning upwards. The price is still yet to break the 200 day Moving Average, which is currently at 1257 and still moving steadily lower.
After making an all time high at the start of October, equities have corrected in a volatile and choppy zigzag pattern, with the Dow falling as low as 24,100 before finding support and the S&P 500 falling over 300 points to a low of 2,627 before recovering.
The Dow is currently at 25,150, some 1,800 points below the all time high of 26,967, with the S&P 500 currently at 2,715, over 200 points lower than the all time high of 2,941.
Following equities, oil has sold off sharply - at one point trading below $50 a barrel - over $27 lower than the recent highs around $77 a barrel. This dramatic 35% sell off is being taken by some as a portent to a global economic slowdown, though the short term effect on inflation will take the pressure off central banks contemplating further interest rate rises.
Support can be found at 1233, 1228, 1216, 1210, 1201, 1196, 1192, 1182, 1172, 1160, 1145, 1122, 1100, 1072 and 1045. The recent sell off is bearish for gold in the long term time frame and suggests a move towards the 2015 lows at 1045 is becoming more likely.
Short term resistance can be found at 1241-1243, 1265, 1273, 1278, 1284, 1292, 1302 and 1310. Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.