Gold bulls are starting to get going again [Video]

Gold

For a while now, we have been looking to use a near term correction on gold to be a medium term buying opportunity. After the 10% correction in the past week, the move appears to be settling down now. Subsequently, we believe that this run higher is likely to be getting back on track once more. The technicals are stabilising, with RSI around 50 and Stochastics also beginning to tick higher, although the MACD lines which are more of a medium term indicator, are still in retreat. The main caveat for us comes not from technicals, but of how the market would respond to a US fiscal support package. This is likely to cause some near term volatility again if/when announced. In its absence though, the gold bulls are starting to get going again. The hourly chart shows improvement through higher lows and higher highs in the past 48 hours. Following initial consideration of resistance at $1940/$1949, the market is looking to pull higher again, and to use this as a basis of support now. The hourly momentum indicators are no longer corrective and are at least taking a more neutral configuration. It means that support initially at $1920 but more importantly at $1906 is growing in importance now as a near term gauge. Yesterday’s high of $1965 is an initial barrier this morning, but a retest of 1980/$1984 (old consolidation resistance) could now be seen. We cannot ruled out another lurch lower on the announcement of a US fiscal support package, but it looks to be that this weakness is a chance to buy and the market is looking for medium term opportunities now.