The bulls will be encouraged by the close above 1600 and the ability to hold onto this level as the markets digest the Cyprus situation. Equities recovered strongly from the overnight panic lows and the dollar has continued to benefit, the bulls will gain further confidence from this.
Oil also recovered strongly after falling sharply with other commodities yesterday and is now trading around $94 a barrel. This should support gold further, though the usual correlation between gold and oil has not been apparent for some time now.
The next target for the bulls is 1620 - if gold can break through this resistance level, the bottom will be confirmed and the shorts will start to run for cover. Momentum traders will start to take long positions as well, so a decisive break of 1620 should see a strong rally develop.
Support can be found at 1591, 1577 and 1560, though a break of 1591 will bring back the prospect of a retest of key support at 1554-1560.
Today's video for subscribers looks at the key resistance levels above and our strategy for our current trade.