Gold: Trending Bearish In The Short Term

LONG TERM TREND: BEARISH
INTERMEDIATE TERM TREND: NEUTRAL/BEARISH
SHORT TERM TREND: BEARISH
VERY SHORT TERM TREND: BEARISH

Gold jumped yesterday on news that the Chinese were introducing Quanititatie Easing, of sorts, however the "knee jerk" response that saw all commodities and equities move higher was shortlived, at least in gold's case.

The market remains in bearish mode, with the sharp sell off since the break down out of the triangle pattern taking the price below $1240, a level that is now acting as resistance in the short term. Since making a low at $1225, gold has moved hesitantly higher, with long tails on top of the candlesticks on the daily chart suggesting that any rallies are being seen as opportunities to sell and lighten positions.

This does not bode well for the yellow metal and we expect a resumption of the decline once the oversold RSI position has unwound, with $1180 the next target for the bears.

Today sees the FOMC interest rate decision from the US - whilst no change is expected this month, traders will be watching the statement closesly for clues as to when the Fed expects to begin raising rates.

Thursday sees the Scottish independence referendum, with the real possibility of a Yes vote sending jitters through the currency markets.

Support can be found at $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 - the failure to break the 65 week MA and the break down of the triangle pattern on the daily chart has make this scenario much more likely.

Resistance can be found at $1240, $1257-$1258, $1263, $127$1-$1273, $1277, $1290-$1292, $1300-$1302, $1310-$1312, $1322-$1325, $1333-$1335, $1340-$1342, $1352-$1354, $1392-$1395, $1400, $1420 and $1435. A second failure to break through the key 65 week MA suggests that the intermediate down trend is intact and a retest of $1$180 is now likely.