INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND BULLISH
VERY SHORT TERM TREND BEARISH
Since our last update, gold has broken out of the narrow trading range between 1181 and 1212 that contained the price during September. On 11 October, gold powered higher, smashing through the top of the trading range, moving as high as 1243 and has stayed above 1215 since then.
In our last update, we stated that our view was that the downside presents the most likely path into year end, though a break above 1216 would suggest that a short term low has been made in gold. As we have now had this break above 1216 and a number of successful retests of the top of the previous trading range, we are likely to see gold rally towards the high 1200s into the year end. However, a reversal and break below 1212 would suggest another test of 1180 - if this level were to fail, a swift return to the low 1100s would be likely in the short term.
Gold is now trading above both the 50 day Moving Average, currently at 1205, and the 89 day Moving Average, currently at 1214. The 50 day moving Average has curled upwards in a bullish posture, however the price remains below the 200 day Moving Average at 1272.
After making an all time high at the time of our last update, equities have corrected sharply, with the Dow down over 2,000 points from the highs and the S&P 500 falling 300 points.
The Dow is currently at 24,700, over 2,000 points below the all time high of 26,967, with the S&P 500 currently at 2,665, almost 300 points lower than the all time high of 2,941.
Following equities, oil has sold off sharply and is currently trading around $66 a barrel, over $10 lower than the recent highs around $77 a barrel, moving in lock step with equities.
Support can be found at 1220, 1215, 1209, 1201, 1192, 1182, 1172, 1160, 1145, 1122, 1100, 1072 and 1045. The recent sell off is bearish for gold in the long term timeframe and suggests a move towards the 2015 lows at 1045 is becoming more likely.
Short term resistance can be found at 1233, 1243, 1265, 1273, 1278, 1284, 1292, 1302 and 1310. Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.