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Gold Report: Neutral Bullish

ByKeagan York
Published 10/21/2011, 09:12 AM
Updated 07/09/2023, 06:31 AM

GOLD had a number of attempts to break lower overnight trading as low as $1,604 and as high as $1,630. It opens the Asia session at $1,620. Although we remain bullish in the medium term, the short term outlook for gold has become increasingly uncertain as it continues to test lower. It came perilously close to breaking through psychological support at $1,600 on a number of occasions and looks particularly vulnerable at current levels.

We will remain neutral in the short term for now but will be forced to re-evaluated on a break of $1,600. We are still trying to come to terms with what the recent changes to trading limits by the CTFC in relations to commodities will mean foe the gold price. Some commentators and certainly the CTFC believe that the changes will act to stabilise prices but this is yet to be seen.

Gold appears to be tracking firmly with US equity futures for now and we will not fight the correlation for now. At current levels we are very reluctant to trade gold. We need to see a close higher above $1,650 to signal a resumption of the uptrend. A break of $1,550 will be a very bearish signal.

Compass Direction Short-Term Medium-Term NEUTRAL BULLISH

Please see the attached chart below.

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