We can only assume that this move was an exercise in stop hunting to take out all of the shorts that had piled in expecting a sell off in gold following the resolution of the US debt ceiling debacle.
Until we see a decisive break out of the down trend channel and a number of closes above it, the bears still remain in charge.
Today, a weak dollar and equities have helped to support gold, though not to the extent that the burst higher this morning would explain.
We need to see where gold settles down, particularly when the US markets open this afternoon, however our preference remains to the down side.
Support can be found at 1300-1305, 1290-1292, 1272-1275, 1260, 1250-1253, 1220-1225, 1200 and 1180 - a break of 1180 would be an extremely bearish development, suggesting a short term target of 1000-1050 and a possibility of a drop to 800.
Resistance can be found at 1320-1322, 1330, 1353, 1375, 1400 and 1434. A break of 1434 would be a bullish development and suggest gold was on its way back above 1500.
Today's video for subscribers looks at the recent trading action and our thoughts for our next trade.