The breakdown below not only $1902 but also $1863 have been key moves on gold this week. It means that the near to medium term outlook is now corrective. Momentum indicators deteriorating to levels that reflect this new outlook suggests that little near term rallies are now a chance to sell. A very mild positive session yesterday has left near term support at $1847 but how the bulls respond to a tick back higher will be telling of their mindset now. The band of support which we talked about frequently during August into September, between $1902 (late August low) and $1926 (the 23.6% Fibonacci retracement of $1451/$2072) is now resistance. The hourly chart shows $1882/$1894 is initial resistance. A failed near term rally around or below here would be seen as another chance to sell for a continuation of the pullback towards the 38.2% Fib retracement at $1835. We have drawn in a tentative six month uptrend, formed from the recent retreat. The rising 89 day moving average (around $1860) is also flanking this trend which we now watch with interest. A close above $1926 improves but the corrective phase of lower highs and lower lows remains in place at least whilst the five week downtrend is in place.
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