INTERMEDIATE TERM TREND: BEARISH/NEUTRAL
SHORT TERM TREND: BULLISH
VERY SHORT TERM TREND: BULLISH
Whilst the well established down trend is still in play, gold is showing definite signs of bottoming, with a higher low at 1143 last week followed by a powerful surge to 1222 potentially the beginning of a new uptrend. Gold appears to be forming a "bull flag" on the daily chart that would suggest a rally to 1265 is imminent.
This would break the intermediate term down trend decisively and confirm the intermediate term bottom at 1131, however there is a lot of resistance above the current price. The price has bounced off the 20 DMA and broken through the 50 DMA in the last couple of days, though the 61.8% retracement level at 1208 has so far contained the price and the down trend channel currently sits at 1213.
The dollar and equities continue to rally strongly, whilst oil has fallen to new multi year lows over the past couple of trading sessions. Whilst this fundamental environment is clearly bearish for gold, the technical picture is much more positive, as outlined above.
Support can be found at 1200, 1191, 1186, 1180-1183, 1175-1178, 1154, 1145-1147, 1131, 1124, 1100, 1085, 1045 and 1000 . Although the break of 1180 has serious bearish implications for gold and suggests a decline to 1000-1050 in the short term, gold has bounced back and appears to be building a base to move higher.
Resistance can be found at 1208, 1222, 1225, 1235, 1250, 1255, 1263, 1271-1273, 1290-1292, 1300-1302, 1310-1312, 1322-1325, 1333-1335 and 1345. A second failure to break through the key 65 week MA confirms that the intermediate down trend is intact however the recent trading suggests the bulls may be building a base for a rally.
Today's video for subscribers looks at the recent trading in more detail and our strategy for today's trading session.