Richard Perry
Independent Analyst
The outlook for gold has taken a significant turn for the worse after a strong bout of selling pressure has breached the key reaction low support at $1231.50. The concern is that the momentum indicators have started to deteriorate. The Stochastics have a confirmed crossover sell signal now. What had been an improving medium term outlook is now mixed at best. Losing support at $1231.50 has suggested that the bulls have lost control, however if the support at $1221.70 is broken then the gold price will be at risk of further downside possibly back towards the lows. The intraday chart shows that old support in the band $1331.50/$1340 is turning into resistance and could now cap the upside near term. With hourly momentum indicators now in bearish configuration the outlook is certainly deteriorating. It would turn bearish again below $1221.70.
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