Richard Perry
Independent Analyst
Gold
The corrective run on gold may have lost some of its momentum in recent sessions, but moving into the European session on Monday, as yet there is still little sign of recovery. The move lower continues to trade around what we see as a tentative uptrend of the past six months (which sits around $1858 today).However, this comes as gold closed below $1863 on Friday (the old August spike low) and continues to tick lower early today. Having moved below the 23.6% Fibonacci retracement (of $1451/$2072) at $1926, this implies a move towards the 38.2% Fib is likely (around $1835), whilst the next real support is not until $1818 (old July breakout). With technical momentum indicators turning decisively corrective last week, we see rallies struggling now. Initial resistance is at $1878 under the key band of overhead supply above $1902. The interesting factor will still be how gold reacts to any move lower on the dollar and also a pick up in risk appetite. Both should be gold positive, but a failure to take this on will continue the downside bias in the technicals now.
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