The break of 1404 suggests gold is correcting in an ABC pattern, though the strength of the recovery from Monday's monumental sell off is not particularly inspiring for the bulls and we still expect lower prices in the coming weeks.
Gold may move as high as 1450-1475 duing this correction, though we do not expect the price to move any higher than this - if it does, a retest of 1525 is likely. Following the correction, we expect the price to sell off hard again, retesting 1320 and possibly dropping towards 1200 before this liquidation sel off is completed.
Oil has recovered well from lows around $86 and has recaptured the crucial $88 level - further oil strength could help lift gold higher, though weakness in oil and equities would suggest more downside for all assets and a deflationary environment.
Today's video looks at yesterday's trading in more detail and our strategy for our next trade.