Gold: Bulls now need to regather themselves [Video]

Gold

Our fears of gold being dragged under by broader market selling pressure came to pass yesterday as the price fell -3.5% on the day. We have been looking for buy signals within the three month uptrend, but that trendline was smashed by the move and the bulls now need to regather themselves. If the move is anything like the similar, margin call related sell-off of 28th Feb, the market dusted itself down and went again higher. It is interesting this morning to see gold trading higher and already +$35 off its earlier low at $1551. Within the context of still positively configured medium term momentum signals, we remain medium term buyers of gold into weakness whilst the support at $1536 remains intact. Near term positive signals are coming through on the hourly chart this morning, but hourly RSI above 60 would be needed to say the bulls are serious again. Resistance at $1606/$1611 now needs to be overcome to suggest a resumption of the move higher. A bull failure, with a negative close and move below $1560 (yesterday’s low) would be a concern that momentum of the correction has not finished yet.