We began discussing the potential for the end of the selling pressure on gold yesterday. An initial attempt at recovery faltered at $1553 before falling consistently during the session to leave yet another strong negative candle. However, coming into the European session today, there has been a pick up off the lows once more. There is still an appetite to support gold between $1450/$1465, but this is just a near term situation right now. How the bulls respond today will be interesting. The hourly chart shows that resistance has started to form between $1500 and the mini neckline at $1519 (turning into a pivot). If the bulls can mobilise and push through this resistance then the prospect of a recovery may not be so fanciful. Hourly momentum indicators are slightly encouraging but nothing yet to suggest a sustainable rebound though. Given how the market responded yesterday with renewed selling pressure, the risk remains to the downside and a breach of $1445 (the November low) would open the floodgates once more.
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