Gold fell further yesterday, dropping as low as 1277 in quiet trading before rebounding slightly into the close. The 100 DMA at 1284 is providing support with the 80 and 200 hour MAs now providing near term resistance at 1288 and 1291 respectively.
The theme for the week has been bearish trading within a narrow range as the gold price looks set to fall back towards last week's lows at 1268.
Equities are also virtually flat, though stocks remain at or near all time highs and look likely to advance further next week. This will keep the pressure on gold aqs will the tumbling oil price - the weak dollar does not appear to be helping gold at all, which is worrying for the bulls.
May is often a strong month for gold before we enter the summer doldrums from June to August, where gold traditionally drifts sideways to lower in quiet trading - much like we have seen this week in fact.
Support can be found at 1284, 1277-1280, 1267, 1250-1255, 1237-1240, 1220-1225, 1210, 1200 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term, though this now looks unlikely unless we break below 1250.
Resistance can be found at 1288-1291, 1298-1301, 1304-1306, 1314-1315, 1320-1322, 1330-1332, 1340-1342, 1352-1354, 1392-1395 and 1400. The impulsive breakout above the first down trend line on the weekly chart suggests an end to the intermediate term down trend, however the 65 week MA must be broken before a significant rally can develop.
Today's video for subscribers looks at the recent trading in more detail and our short term thoughts for gold.