Richard Perry
Independent Analyst
Gold is another instrument that has reached a crossroads and if the rally continues from here I may need to turn more bullish once more. With 4 straight days of gains we have seen the outlook for gold improve dramatically. The recovery has been seen across the momentum indicators with RSI and Stochastics both picking up strongly and even the MACD, which can be slower to react, improving. Having broken the downtrend channel and the barrier of the falling 21 day moving average, the next important test is already underway as the key overhead resistance at $1191 is tested. With the RSI at 50, an improving outlook would suggest the RSI would be consistently pushing towards 60 and above, whilst the Stochastics continue to advance towards positive territory. If gold can now make a consistent break above the old key support at $1191 and hold the break then there will be a considerable improvement in the outlook that we will need to appreciate. The intraday hourly chart reflects this improvement with a series of higher lows (the latest at $11778.85) supportive hourly moving averages and positive configuration across the hourly momentum indicators. I am close to turning bullish once more.
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