Gold held onto the gains overnight and is currently trading around 1390. The action yesterday formed a "bullish engulfing" candlestick on the daily chart, a reliable and powerful reversal pattern.
This suggests a short term bottom may be in and we are likely to see a rally of some sort over the next few sessions. If, and its a big if, gold can move significantly higher from here and break above 1487, a "double bottom" would be confirmed with the 15 April low - however, the market is a long way from there and for now we maintain our overall bearish stance with further price declines expected.
Oil has moved back up to the resistance area around $97-98 - a move above here would suggest a rally to well over $100 a barrel. However, another failure to break this resistance area would see prices tumble back towards the bottom of the current range at $92-93.
The dollar is consolidating at the key 84 level and has so far failed to break decisively above it - whether it does will influence the future direction of gold to a large extent.
Today's video for subscribers looks at the impact of yesterday's price surge in more detail and our strategy for our next trade.