Gold fell sharply again yesterday, crashing through $1300 before making a low at $1292, being the 50% retracement of the June rally and also the level of the 50 DMA. This morning, gold is attempting a rally off this support zone, climibing as high as $1299 so far.
It is not surprising that the market has found support here and a clear 5 wave count can be formed on the 4 hour chart, so a corrective move higher is likely over the next day or two.
Equities remain the favoured asset class, with the S&P and Dow at all time highs. The dollar has rallied impressively after briefly dropping below 80 on 1 July, with the dollar now trading above 80.50.
Oil has tumbled below $100 a barrel again, though formed a "hammer" candlestick on the daily chart yesterday after a sustained decline, suggesting a low may be in.
Support can be found at $1292, $1285, $1263, $1257-$1260, $1250-$1252, $1237-$1240, $1220-$1225, $1210, $1200 and $1180. A break of $1180 would have serious bearish implications for gold and suggest a decline to $1000-$1050 in the short term - however the break below $1250 seems to have been invalidated, indicating that a return to $1$180 is now less likely.
Resistance can be found at $1299-$1301, $1310, $1314, $1318-$1322, $1325-$1326, $1333-$1335, $1340-$1342, $1352-$1354, $1392-$1395, $1400, $1420 and $1435. We appear to be wtinessing a second failure to break through the key 65 week MA - this would suggest that the intermediate down trend is intact and a retest of $1240 and possibly $1180 is likely.