INTERMEDIATE TERM TREND: NEUTRAL/BEARISH
SHORT TERM TREND: NEUTRAL/BULLISH
VERY SHORT TERM TREND: BULLISH
The volatility in markets continued yesterday, with equity markets continuing their plunge as worries about Europe persist, US data remains weak and the end of QE rapidly approaches. However, the mood was dramatically reversed during the US trading session, as Fed spokesman Bullard hinted that the end of QE could be delayed.
This sent stocks and oil soaring, however the reaction in gold was muted - the favoured aset class is clearly still equities.
We maintain our stance that the recent rally in gold is corrective in nature and after an ABC counter trend rally, we expect the decline to resume.
Support can be found at 1235-1238, 1222, 1217, 1203-1205, 1200 and 1180-1183. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term - the failure to break the 65 week MA and the break down of the triangle pattern on the daily chart makes this scenario much more likely, particularly as gold has now reached and tested this crucial support level.
Resistance can be found at 1242, 1250, 1257-1258, 1263, 1271-1273, 1277, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335, 1340-1342, 1352-1354 and 1392-1395. A second failure to break through the key 65 week MA confirms that the intermediate down trend is intact and a retest of 1180 suggests a break of that level is likely.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.