Regular readers of my market analysis will know that I have been bearish on gold for some time, and despite the recent bullish trend which has seen gold move from the lows of $1170 per ounce to the high of late January at $1310 per ounce, have remained so. This is not to say that my intra day trading has all been to the short side – far from it. As I have said several times in the last few weeks, the trading opportunities across all markets have been exceptional since the start of the year as volatility ebbs and flows driven by a variety of factors, and it is all a question of perspective.
For intra day trading, the bias since the start of the year has been bullish, but with gold running into the deep resistance in the $1310 to $1320 per ounce area, this has once again changed to bearish, reflecting the longer term trend for the precious metal. Friday’s price action confirmed this once again, driving through the platform of support in the $1255 per ounce region and closing at $1234.60 per ounce, having lost $31.80 per ounce on the day. The move lower was accompanied with high volume confirming the price action of the wide spread down candle, and if the current level of support which is presently being tested in the $1235 per ounce area is duly breached as expected, then expect to see gold move lower in the short term, and down to test the $1210 per ounce region, with a move through here then opening the way to a test of the $1140 per ounce area in due course.
For gold investors, the outlook remains heavily bearish, whilst for gold traders, the motto remains the same – be agnostic, and trade what you see and not what you think.
By Anna Coulling