Gold Market Update

New York (July 17)  After attempting to rally off support at 1237, gold managed to reach the 89 week Moving Average at 1267 before finding resistance. The yellow metal has since sold off steadily, making a new low at 1236 at the end of last week.

The gold price is now consolidating near the lows, suggesting further selling to come. A break of the 200 week Moving Average at 1234 should see a further decline towards 1204. The price remains well below all of the major moving averages, which are all pointed lower.

In our last update we stated that we felt that it was likely that the sell off in gold was near an end and a bounce towards 1300 was probable. However, gold stalled at the first resistance level and has since sold off sharply again, suggesting that 1200 is more likely than 1300 in the short term. The 50 day Moving Average is currently at 1281 and will provide resistance, together with the 200 day Moving Average and the 89 day Moving Average both at 1302.

Equities remain in the corrective triangle pattern that we highlighted in our previous report, though have moved to the top edge of the triangle and are testing the trendline for a breakout. As we stated in our previous report, support remains strong and we expect the rally to resume later in the year with new all time highs likely.

The Dow is currently at 25,070, some 1,660 points off the all time high, with the S&P 500 currently at 2,794, approximately 84 points off the January highs.

After hitting a peak of $74 two weeks ago, oil is correcting after a strong rally, however, the uptrend remains intact.

Support can be found at 1236, 1214, 1204, 1194, 1180, 1145, 1122, 1100, 1072 and 1045. The recent sell off and yet another rejection of the long term down trend line is bearish for gold in the long term time frame and suggests a move towards the 2017 lows at 1204 is likely.

Short term resistance can be found at 1266, 1272, 1281, 1292, 1302 and 1310. Gold needs to break the key resistance level at 1360 to give the bulls some momentum and long term control.

Investing.com