Yesterday saw a quiet day of trading due to the Bank Holiday in the UK, however this morning gold is under pressure again and retesting Friday's lows.
The 1475-1485 resistance area is proving too strong for gold to break through and we consider the likelihood of further declines to be significant from here. The rebound from the lows at 1322 has been stronger than we were expecting, though it appears that the bulls have finally run out of steam and, unless 1485 is broken decisively soon, a sell off is highly likely.
Oil found resistance above $97 and has reversed sharply - it is possible that a top in oil is forming at this level.
Equities are flat, though are holding onto recent gains and could be on the verge of a major breakout, with the price now at all time highs and well clear of the 2000 and 2007 major tops for the first time.
A major equities rally would be bearish for gold, as the recent strength in equities has been diverting funds away from commodities and precious metals in particular. Investors are looking for returns and equities are currently offering both capital growth potential and dividend payments, something gold cannot offer.
The dollar is still being capped below resistance at 84, though again a breakout above this level will be bearish for gold.
Today's video for subscribers looks at the recent trading action in more detail and our strategy for our next trade.