Gold: Is weakness supported? Does momentum improve? [Video]

Gold

The corrective conditions are still in place on gold. The question is whether the move has played out in its entirety yet. We continue to view near term corrections as a chance to buy on gold. Looking back at the price action on previous moves lower on gold, during normal market conditions, the selling pressure has been limited before the buyers have moved to support. The only times where significant lurches lower have been seen have been when significant strain has hit through equities, with margin call related selling associated with gold. Unless this massive strain kicks in across equities, we see gold will retain its attraction as an outperformer in this market. So it was interesting to see gold bouncing off the old $1671 breakout yesterday. There is a small top pattern on the hourly chart which implies $1666/$1671 as a target area. SO this move may have already now played out. We need to see how gold begins to react now. Is weakness supported? Does momentum improve? The reaction around the $1702 neckline could be key. It was resistance yesterday, but if this is now breached, with improving momentum, then this is a sign that bulls are gaining strength once more. Hourly RSI consistently moving above 60 and hourly MACD consistently higher above neutral would be positive signals too. A failure under $1671 would defer this move, but the longer that $1671 holds, the more interested the bulls will become.