Gold powered higher yesterday, hitting a high of 1325, right at the 61.8% retracment of the decline, before retracing back to currently trade around 1310. The rally does not make up for the fact that gold is sharply down for the week and is in serious danger of another failure to break the 65 week MA, a very bearish long term signal.
The bulls must push the price back above last week's high at 1345 to avoid a potentially catastrophic failed breakout and a virtual guarantee of a return to 1180 - the signs do not look good for the bulls at this juncture.
Equities remain strong and near to all time highs, the dollar is trading back above 80.50 and oil has tumbled back to $100 a barrel. All of these factors are negative for gold and add to the bearish picture.
Support can be found at 1310, 1299-1301, 1292, 1285, 1263, 1257-1260, 1250-1252, 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 much more likely.
Resistance can be found at 1318-1322, 1325-1326, 1333-1335, 1340-1342, 1352-1354, 1392-1395, 1400, 1420 and 1435. We appear to be wtinessing a second failure to break through the key 65 week MA - this 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.