INTERMEDIATE TERM TREND: BEARISH
SHORT TERM TREND: BEARISH
VERY SHORT TERM TREND: NEUTRAL
Gold rallied strongly on Friday after a weaker than expected Non Farm Payrolls number, surging from a low of 1131 to close at 1178, just below the key 1180 resistance level. This rally took the yellow metal to an exact 38.2% retracement level of the recent decline on Friday.
This price action resulted in a bullish "hammer" candlestick on the weekly chart and an equally bullish "three river morning star" on the daily chart, however as we have seen so many times in the past (and particularly this year) with "knee jerk" moves driven by news releases, the market sold off steadily all day yesterday to invalidate the bullish chart patterns.
The bears are now fully in control and the failure to break 1180 on the retest will give them confidence to press the price lower, with a target of 1050 the likely aim. The dollar rally appears to be gathering strength as it breaks through 88 and equities remain the "go to" investment class with the bull run end nowhere in sight.
Support can be found at 1145, 1131, 1124, 1100, 1085, 1045 and 1000 . The break of 1180 has serious bearish implications for gold and suggests a decline to 1000-1050 in the short term.
Resistance can be found at 1157, 1178-1180, 1202, 1217, 1225, 1235, 1250, 1255, 1263, 1271-1273, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335 and 1345. A second failure to break through the key 65 week MA confirms that the intermediate down trend is intact and the break of 1180 suggests the bears are in full control.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current short position.