Richard Perry
Independent Analyst
The consolidation on gold continues. Since hitting a low at $1077 just over a week ago the price has settled down. Perhaps this is part of the unwinding process for the oversold momentum but the consolidation is bringing a sense of calm to trading. I do not believe that this is part of a basing process though. The speed of the early to mid-July sell off saw extreme levels reached on the RSI and the fact that the price did not react with a strong instant unwinding bounce is interesting and suggests an acceptance. The hourly chart shows the resistance is in place below $1105.60 and this is holding back the bulls. The hourly RSI has become rangebound between 30/70 and reflects the sideways consolidation. I am still favouring the sellers ultimately for a downside break and below $1077 would open the 2010 low at $1043 again.
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