This morning, the price is drifting lower again as the dollar rally resumes and equities remain well supported.
The key to gold's fortunes over the coming weeks will be the dollar - whether the recent dollar rally continues and reverses the recent breakdown or fails and continues to decline will determine gold's path. We strongly suspect that the dollar rally will continue and gold will decline back below 1300, with 1250 our first target and 1180 a distinct medium term target.
The weakness in oil also bears watching, as the sharp falls recently suggests that deflation is back on the cards and the threat of inflation is non-existent at present. A continuation of the selling in oil would be a bearish underlying signal for gold.
Support can be found at 1310, 1300-1306, 1291, 1277, 1260, 1250, 1207 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 as a minimum.
Resistance can be found at 1322, 1328-1330, 1338-1342, 1352-1355, 1360, 1375, 1400 and 1434. A break above 1434 would suggest a major rally was unfolding with a target of 1525 as a minimum.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our current short position.