We commented yesterday that the risks remained to the downside in gold and overnight the yellow metal has tumbled $30, breaking through the bottom boundary of the recent trading range and uptrend channel to currently trade at 1290.
The break below 1300-1305 is siginificant - unless the market can regain this area quickly following the release of the NFP jobs number, much lower prices are likely. We suspect that a resurgent dollar will be the catalyst that sends gold back to the low 1200s and the NFP number could be pivotal for the direction of gold over the next few weeks.
The S&P broke through 1700 for the first time yesterday and the strength in equities continues apace. Oil also powered higher yesterday, breaking $108 and is now on course to test $110 and $114.
Today's video for subscribers looks at the recent trading action in more detail and our strategy for our next trade.