Richard Perry
Independent Analyst
Just from a matter of the experience of analysing charts over a number of years, the trend is your friend for a reason. Reversals occur a lot less frequently that you think. I say this because gold has been consolidating for the past few days after having seemingly been in sharp decline back towards the 2010 low at $1043. The price action is now at an extent that a confirmed break above $1105.60 would complete a small base pattern on the hourly chart (a confirmation would come on a move above $1109.50 resistance. However looking at the daily chart there is little to get excited about. Any improvement in momentum indicators is purely because they are unwinding from an extreme oversold position rather than momentum showing serious signs of a sustainable improvement. The sheer fact is that the gold price is now just not being sold off for the time being. That does not mean that a recovery is imminent. One may be seen, but even then I do not see it as a rally to last for long before the bears get the control back. The chart support levels come in at $1088.80 and then the key low at $1077.
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