INTERMEDIATE TERM TREND BEARISH
SHORT TERM TREND NEUTRAL/BEARISH
VERY SHORT TERM TREND BEARISH
Following the entirely unsurprising announcement of another interest rate hike by the Fed, Gold sold off sharply, giving a very bearish candlestick on the daily chart that is eerily similar to that printed in early November 2016 following the US election.
This could well be the start of another protracted sell off that could see gold sell off all the way back down to 1200 again – if today’s follow through selling pressure is anything to go by then this looks a good bet.
Gold has yet again failed to break out above the 2011 downtrend line and has broken below the 20 and 50 day Moving Averages. The 200 day MA at 1240 will provide a key test of gold’s direction of travel and a break below will suggest a test of the upward sloping trendline at 1228 as a minimum.
The recent surge in inflation both in the UK and US has not yet provided a boost to gold, however this may be due to the prospects of further interest rate hikes being dampened following recent weak US data.
Equities have surged higher in recent trading sessions, with the Dow at all time highs around 21,300 and the S&P at 2,420.
Oil has corrected sharply in recent weeks and is now below $45 a barrel after making highs around $55 a barrel at the start of 2017.
Support can be found at 1251, 1240, 1228, 1214, 1200, 1193, 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 timeframe and suggests a move towards the 2016 lows is increasingly likely, unless gold can break above the 2011 down trend line.
Resistance can be found at 1265, 1275, 1280, 1288 and 1296-1300. Gold needs to break the key resistance level at 1296-1300 to give the bulls some momentum and long term control.