INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND NEUTRAL
VERY SHORT TERM TREND NEUTRAL/BEARISH
We still consider that there are several signs of weakness inherent in the gold market at the moment and are still of the view that a retest of support at 1182 is a probable outcome in the short term.
Gold has continued to oscillate in a narrow $25 range between 1187 and 1212 with a slight downward bias for the past month and considering the sharp decline from April to August, this does not suggest that a bottom is in place but rather that the price is consolidating near lows before another leg down.
A break above 1216 would suggest that a short term low has been made in gold and a break below 1175 would suggest another test of 1160 - if this level were to fail, a swift return to the low 1100s would be likely in the short term.
At present, the price still remains below all of the major moving averages, which are all pointed sharply lower. Gold did test the 50 day Moving Average at 1212, though this level was strongly rejected. The 50 day Moving Average is therefore strong resistance and is currently at 1208. The 200 day Moving Average is currently at 1284 and the 89 day Moving Average at 1241.
We have stated several times in our previous reports that support for equities remains strong and we expected new all time highs later this year. After making yet another all time high last week, this week the Dow has consolidated just above 26,100, with the S&P 500 taking stock just below the 2,900 level.
The Dow is currently at 26,126, just below the all time high of 26,223, with the S&P 500 currently at 2,895, just shy of the all time high of 2,916.
Oil found some resistance just below $71 a barrel and has retraced slightly to currently trading around $69.50 a barrel.
Support can be found at 1195, 1192, 1189, 1182, 1172, 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 1204, 1207, 1214, 1218, 1233, 1265, 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.