INTERMEDIATE TERM TREND: BEARISH
SHORT TERM TREND: NEUTRAL/BEARISH
VERY SHORT TERM TREND: BULLISH
Gold has rebounded from the 1130 lows a couple of weeks ago, printing two bullish "hammer" candlesticks on the weekly chart and testing the 50 DMA at 1205 yesterday. However, the down trend remains in force and we consider this rally to be a counter trend move, with the down trend likely to re-establish itself shortly.
The rally from 1130 has been choppy and overlapping rather than impulsive, suggesting that it is corrective in nature, tracing out a classic ABC pattern and retracing 61.8% of the recent decline.
Equities remain well supported and near to all time highs, oil continues to plummet along with inflation expectations and the dollar rally shows no sign of stopping. This all adds up to a weak environment for gold, with the technicals adding weight to the bearish case.
Support can be found at 1180-1183, 1175-1178, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000 . The break of 1180 has serious bearish implications for gold and suggests a decline to 1000-1050 in the short term, unless gold can hold above this level and build a base to move higher.
Resistance can be found at 1200, 1205, 1217, 1225, 1235, 1250, 1255, 1263, 1271-1273, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335 and 1345. A second failure to break through the key 65 week MA confirms that the intermediate down trend is intact and the break of 1180 suggests the bears are in full control.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current short position.