Gold: the key will now be how far the bulls can take a recovery [Video]
|Gold
The selling pressure through the US dollar into yesterday afternoon allowed gold to claw back much of the earlier lost ground. It turned what looked to be a renewed corrective session into a move which now just further clouds the outlook for gold. In recent sessions, we have been considering the reaction of traders as they returned from Thanksgiving. The fact that support at $1450 continues to build and $1445 has not been tested for three weeks, suggests that the selling pressure just cannot build momentum right now. The key will now be how far the bulls can take a recovery. The resistance around $1480 which houses a large batch of overhead supply from August through to October will be a crucial factor in how the near to medium term outlook develops. There is still a corrective configuration on momentum indicators with the RSI and Stochastics still below their neutral lines, but they are now beginning to pick up again. Previously, in recent months, the bulls have faltered in a recovery and rallies have been sold into. Already we see that could be again happening, as the market just begins to drop back again. We retain our negative bias and still believe that rallies will fade. It is just that the selling pressure is also inadequate right now to drive a breakdown.
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