INTERMEDIATE TERM TREND NEUTRAL
SHORT TERM TREND BEARISH
VERY SHORT TERM TREND BULLISH
Gold has steadily sold off since the final attempt to breach 1360 in April 2018 and last week finally found support at 1237.
The gold price has rebounded back above 1250 and is currently trading at 1254. The price remains well below all of the major moving averages, which are all pointed lower.
In our last update we stated that we felt that it was likely that the sell off in gold was near an end and a bounce towards 1300 was probable. This appears to have been correct and a bounce is underway. The 50 day Moving Average is currently at 1292 and will provide resistance, together with the 200 day Moving Average at 1302 and the 89 day Moving Average at 1310.
Equities remain in the corrective triangle pattern that we highlighted in our previous report. Importantly, in the short term, the equity market has changed from a “buy the dips” to a “sell the rallies mentality, however there remains good support and we expect the rally to resume later in the year with new all time highs likely. The Dow is currently at 24250, some 2,450 points off the all time high, with the S&P 500 currently at 2,722, approximately 130 points off the January highs.
The strong rally in oil continues after the dramatic sell off in May and June 2017 that saw a low of $42 a barrel, with the price of a barrel of oil now trading near $72.
Support can be found at 1237, 1214, 1204, 1194, 1180, 1145, 1122, 1100, 1072 and 1045. The recent sell off and yet another rejection of the long term down trend line is bearish for gold in the long term timeframe and suggests a move towards the 2017 lows at 1204 is likely.
Short term resistance can be found at 1261, 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.