INTERMEDIATE TERM TREND: NEUTRAL/BEARISH
SHORT TERM TREND: BEARISH
VERY SHORT TERM TREND: BEARISH
The rally in gold was short-lived to say the least, with traders pouncing on the opportunity to exit longs as gold surged briefly to 1235 on Tuesday. That rally has now been retraced in its entirety, with gold breaking below Monday's low at 1208 and looking certain to test 1180 in short order.
As we have been commenting all year, the 1180 level is critical long term support, a break of which would be seriously bearish and suggest a quick return to 1000-1050. The surging dollar, continuing bull market in equities and collapsing oil price are all adding to the bearish picture for the yellow metal, with geopolitical uncertainty unable to arrest gold's decline.
The bulls will be manning the barricades to hold the 1180-1200 level, we do not expect this level to fail without a fight, however this third test of 1180 is likely to fail eventually.
Support can be found at 1208-1210, 1200 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term - the failure to break the 65 week MA and the break down of the triangle pattern on the daily chart has make this scenario much more likely.
Resistance can be found at 1225, 1240, 1257-1258, 1263, 1271-1273, 1277, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335, 1340-1342, 1352-1354 and 1392-1395. A second failure to break through the key 65 week MA suggests that the intermediate down trend is intact and a retest of 1180 is now likely.
Today's video for subscribers looks at the recent trading in more detail and our strategy for trading this market.