Gold: The outlook for the yellow metal is deteriorating [Video]

Gold

With a second close lower in the past two sessions, already threatening to turn into a third today, the outlook for gold is deteriorating. We have been talking about the near term importance of the pivot at $1702 and the support of this pivot has been decisively broken today. With this coming as momentum indicators are starting to deteriorate, we must turn at least cautious of the outlook for now. With RSI and Stochastics ticking lower, MACD lines are crossing lower. This at least suggests our bullish outlook is on hold for now. In recent weeks, the old March high at $1702 has become a gauge for the near term outlook. Breaking back underneath it this morning puts the bulls on the defensive again. Looking on the hourly chart, at the least, it looks as though the near to medium term outlook is now a range play. We have previously discussed the mini top and bottom patterns that form based around the $1702 pivot, and another downside break of the pivot has opened the $1660/$1670 band of support now. The hourly chart shows support now of a range between $1660/$1670 and resistance of $1738/$1746. The pivot is now a barrier to gains and although there is a minor initial support at $1690 which is holding early in the European session but a breach would effectively open the range lows again. A confirmation (closing) breach of this pivot will suggest that playing this range is now the near to medium term strategy.