The market appears to be attempting to form a base above 1550 from which to start a new rally leg, though the market remains fragile and vulnerable to further sharp declines in the near term.
Friday's "hammer" candlestick forms a potentially constructive "higher low" on the daily chart that will be confirmed on a break above last week's high at 1620, however gold is struggling to remain inside the down trend channel of the past 5 months and a sharp fall could unfold if the price drops out of this price channel. The RSI readings are also helpful as momentum slowly starts to return to the bulls.
Oil remains very weak, trading around $90 a barrel, some $8 off the recent rally highs and the dollar continues to go from strength to strength. These "outside markets" are adding to gold's difficulties, though the correlations between these markets and gold is not presently as strong as it traditionally has been in the past.
Today's video looks at some Fibonacci patterns that arose on Friday and our strategy for our current trade.