INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND BEARISH
VERY SHORT TERM TREND BEARISH
Gold has been under severe selling pressure for the past few months, with a series of lower highs since April and a rapidly declining price profile since July, however we appear to have finally found some short term support at the 2017 down trend line at 1160. If this support level gives way, the bears will be looking to take the price of gold back down to the low 1100s and ultimately challenge the bear market lows at 1045 made in December 2015.
In our last update, we stated that the break of the 200 day Moving Average suggested a test of 1204 – in fact, this level provided scant support and quickly gave way, with a sharp decline to 1160 following within a few days. The price remains well below all of the major moving averages, which are all pointed sharply lower.
In our last update we stated that we felt that 1200 was more likely than 1300 in the short term and that has also proved correct. The 50 day Moving Average is currently at 1241 and will provide resistance, together with the 200 day Moving Average at 1294 and the 89 day Moving Average at 1272.
Equities remain in the corrective triangle pattern that we highlighted in our previous report, though have moved to the top edge of the triangle and are testing the trendline for a breakout. As we stated in our previous report, support remains strong and we expect new all time highs later this year.
The Dow is currently at 25,415, some 1,220 points off the all time high, with the S&P 500 currently at 2,840, just 35 points off the January highs.
After hitting a peak of $74 two weeks ago, oil is correcting after a strong rally, however the uptrend remains intact.
Support can be found at 1160, 1145, 1122, 1100, 1072 and 1045. The recent sell off is bearish for gold in the long term timeframe and suggests a move towards the 2015 lows at 1045 is becoming more likely.
Short term resistance can be found at 1194, 1204, 1212, 1218, 1236, 1266, 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.