This week is shaping up to be a large red candle for gold on the weekly chart, and with RSI on the weekly chart well above oversold levels, lower prices seem highly likely for the rest of the year.
This is historically a strong period of the year for gold and the poor performance is worrying for the bulls, with subdued Indian demand (due largely to government policy) clearly evident, although Chinese demand for gold appears as robust as ever.
The renewed dollar strength, surging equity markets, weak oil and commodities in general and rising interest rates are all conspiring to remove gold's lustre, with investment interest dropping steadily all year with the price.
Support can be found at 1220, 1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1250, 1260, 1270, 1277-1280, 1291-1295, 1300, 1310, 1320-1322, 1328-1330, 1338-1342, 1352-1355 and 1360. A break above 1338-1340 would suggest a new bull trend was underway, though it would take a break of 1434 to confirm this was the case, with a target of 1525 as a minimum.
Today's video for subscribers looks at the recent trading in detail and our targets for this current decline.