Richard Perry
Independent Analyst
The recovery in gold may well be tied into the perceived escalation in geopolitical tensions, however on a technical basis there is also grounding in a near term recovery too. In the past 7 weeks there have a series of lower highs and lower lows and, I believe, the latest rebound is just another small up-leg that will eventually end up leaving yet another lower high. The RSI has been continually retreating to just below 40 and then bouncing and the Stochastics have just turned up to give a near term buy signal. I would point out though that buying within bear phase is a risky play. Waiting for the sell signals is my preferred strategy as I see overhead supply that starts at $1295 and then goes up at $5 increments, meaning that the sellers are ready to return. RSI has tended to peak out around 55 in this bear phase and suggests that there could be further upside first. The intraday hourly chart is reasonably positive for the recovery, with the key support at $1280 protecting a retreat back to $1273.
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