We were turning more cautious on the gold bull run [Video]
|Gold
We were turning more cautious on the gold bull run yesterday as technical studies (RSI and Bollinger Bands) point to overstretched conditions. The reaction into the close yesterday poses a lot of questions now. Losing -$15 from the day high of $1580 the market has formed a highly questionable positive close. A small positive candlestick body after a failed run higher leaves the market in a tricky position. There is a gap still open at $1553 which needs to be filled, but a closing of the gap could trigger some deeper retracement of the bull run. Today’s early move hints of consolidation. After such a strong run higher, the market is unlikely to now simply hover. A loss of traction significantly increases the potential for a profit-taking near term corrective move. The hourly chart shows the 21 hour moving average now taking on a basis of support (currently around $1559). The bulls need to continue their run higher to prevent a slide back. Given the initial bounce off $1555 this morning, a failure under a near term pivot at $1570 followed by a breach of $1555 would be a negative signal. A close under $1553 opens $1540.
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