Gold: Breaking an uptrend is not the end for the bulls
|Gold
During the latter stages of last week we discussed the importance of the market continuing to form support around the 23.6% Fibonacci retracement (of $1451/$2072) at $1926. Intraday tests continue, but the consistent appetite to protect this support into the close is encouraging for the gold bulls. This has been a spluttering phase in recent weeks, where the market has effectively formed a range between $1900/$2000 (with the support low the low at $1902 and resistance of rebound highs at $1991 and $2015. Daily momentum indicators have moderated back into broadly neutral positioning with this loss of traction. It has also meant that the rising three month uptrend which has supported the market since mid-June, is now being breached (albeit not decisively broken yet). Breaking an uptrend is not the end for the bulls, but it does reduce their conviction. We still look for price action to be the determining factor, so continuing to close above the 23.6% Fib important, and certainly closing above $1902. The hourly chart shows resistance between $1945/$1955 needs to be broken to re-invigorate the bulls. We still favour this support holding and for the weakness to be bought into, but our conviction is beginning to be tested.
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