It is clear that, whilst gold remains in a well established and strong downtrend, the market is attempting to form a base and start a new uptrend following the low at 1338 on 19 May.
If gold can rise from here, taking out 1400 and 1414 as initial targets, the prospect of a "double bottom" increases, however it will take a move above strong resistance at 1475-1485 to confirm this "double bottom" is valid.
The strength and influence of the downtrend cannot be underestimated and we remain bearish as long as gold is below 1525. A move above this level will see us move to a neutral stance, with a break of 1800 required for us to move back to an all out bullish positioning.
It will be a long, hard road for gold back from here, though the huge open short interest is potentially the fuel required to sustain a major rally if the market can start to move higher from here and find a spark to reverse the trend.
We continue to maintain our stance that a major rally in gold will not commence until equities correct significantly - whilst it is far too early to call a top in stocks, the big sell off yesterday was a warning sign and a reminder that nothing goes up forever.
Today's video for subscribers looks at the recent trading in more detail and our strategy for our next trade.