INTERMEDIATE TERM TREND: NEUTRAL/BEARISH
SHORT TERM TREND: BEARISH
VERY SHORT TERM TREND: BEARISH
Gold has declined steadily all week since breaking through the bottom boundary of the triangle pattern on 2 September, finding support yesterday at 1243. We suspect we may see a small bounce here, which should be seen as an opportunity to reload short positions, however there is a good chance that the gold price continues to slide.
A break of 1240 would be very bearish and suggest a rapid return to retest 1180 is underway, with a break of the key support level at 1180 likely on what would be third attempt.
The dollar strength has been a major factor in gold's recent weakness, with surging equities compounding the misery and a tumbling oil price failing to provide support. Only a break back into the triangle pattern and a rally to (and ultimately through) the upper boundary would invalidate our bearish stance.
Support can be found at 1243, 1237-1240, 1220-1225, 1210, 1200 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term - a failure to break the 65 week MA would make this scenario much more likely.
Resistance can be found at 1258, 1263, 1271-1273, 1277, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. A second failure to break through the key 65 week MA would suggest that the intermediate down trend is intact and a retest of 1240 and possibly 1180 is likely.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.