Gold is on the verge of breaking out of the major 16 month down trend channel which would be a significant event. A move above 1300 would suggest a bottom was and a new rally leg was about to unfold. However, there is a huge amount of resistance above the current price before that can be considered a real possibility.
It is interesting to see how entwined the fortunes of gold and equities have become, with gold struggling for all of 2013 as stocks made successive all time highs. We maintain our stance that a major rally in gold cannot begin unless or until we see a major corection in the stock market.
Support can be found at 1250-1255, 1237-1240, 1220-1225, 1218, 1214, 1210, 1200, 1190, 1188 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 1268-1270, 1277-1280 and 1291-1295. A break above 1268 would suggest an end to the short term down trend, though it would take a break of 1300 to suggest a more significant rally was developing.
Today's video for subscribers looks at the recent trading in more detail and our thoughts for our next trade.