Richard Perry
Independent Analyst
A big sell-off yesterday started in the Asian session and continued throughout the day as the key support at $1280 was decisively breached. This is a big breakdown and puts the bears firmly now back in control. I also believe this is now the signals that suggests that the medium term outlook is suggesting a retest of the June low at $1240.60. Momentum indicators are increasingly weak, and there is further downside potential in both the RSI and the Stochastics. There has been s slight amount of support that has come in overnight, but the intraday chart shows that there is a resistance between $1280/$1287.50 now that should be the limit of any technical rebound. However in the absence of any flare up in geopolitical tensions (which has been the chief reason behind most rallies in recent months) I would expect the negative technical indicators to continue to drag gold lower in due course. There is initial support at $1258.85, but little real support now until the $1240.60 low.
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