If gold breaks through resistance around 1420, the "double bottom" scenario becomes more likely and the likelihood of a move towards 1445 and 1485 increases substantially.
However, the trend is still down and the bulls are fighting against the tide, their task is not an easy one. A fall back below 1400 will be seen as a failure to break the down trend and gold will be under pressure once again.
Oil has been falling hard recently, though the declines have had little impact on the price of gold. A break below $92 will see much lower prices in oil.
The main driver of this gold rally is the sell off in the dollar, the inverse relationship between the dollar and gold reasserting itself strongly in recent trading sessions. If the dollar cannot rally back up to 84 soon, the dollar may fall further as this will be seen as a failure to break key resistance.
Equities continue to correct - whilst it is too early to say that the rally is over, gold bulls will be watching stocks closely for signs of a top, as this will be seen as bullish for the yellow metal.
Today's video for subscribers looks at the recent trading action and our strategy for our next trade.