Gold found resistance at the top of the recent down trend channel at 1250 yesterday, after moving almost $40 off the lows. The move was particularly impressive as it came in the face of strong employment data and a stronger dollar, though it is worth noting that equities were significantly weaker.
Whilst we still expect lower prices for the rest of 2013, we would not be surprised to see a short term rally develop here that could take gold as high as 1300, however we would not expect the price to break that level. Any rallies are being seen as opportunities to exit long positions or initiate new short positions and we cannot see this changing in the short to medium term.
Support can be found at 1230, 1225-1227, 1217, 1212, 1200-1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1250, 1260, 1270, 1277-1280 and 1291-1295. A break above 1295 would suggest an end to the down trend, though it would take a break of 1360 to confirm this was the case.
Today's video for subscribers looks at the "key reversal" in more detail and our strategy for our next trade.