Gold thrust higher yesterday, breaking through resistance at 1322-1325 and moving as high as 1340 on short covering and technical buying. This morning, gold is back below the 50 DMA and trading around 1332.
There is still a huge amount of resistance above the current price before a bottom can be confirmed and the down trend broken - resistance can be found at the 50 DMA at 1332, 1338-1340 and 1350-1360. It would take a break of 1424 before we considered the down trend broken and a return to 1525 to be likely.
Much of gold's recent strength comes from dollar weakness - the dollar is currently trading around the 61.8% retracement of the recent rally from 80.5 to 85, we expect to see the dollar rally from here and put gold back under pressure.
Equities continue to rise and oil is still trading above $106 a barrel - stocks are still the place to be for investors and until we see a significant correction in stocks, we do not consider a strong rally in gold to be likely.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.
There is still a huge amount of resistance above the current price before a bottom can be confirmed and the down trend broken - resistance can be found at the 50 DMA at 1332, 1338-1340 and 1350-1360. It would take a break of 1424 before we considered the down trend broken and a return to 1525 to be likely.
Much of gold's recent strength comes from dollar weakness - the dollar is currently trading around the 61.8% retracement of the recent rally from 80.5 to 85, we expect to see the dollar rally from here and put gold back under pressure.
Equities continue to rise and oil is still trading above $106 a barrel - stocks are still the place to be for investors and until we see a significant correction in stocks, we do not consider a strong rally in gold to be likely.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.