Gold: Support at 1180.70/1170, resistance at 1200/1221.70
New York (Nov 18) Having broken through the key $1180.70 resistance on Friday, the gold price has since been consolidating the move. The suggestion is that traders are in keen debate over their next move. This could be a near to medium term crossroads. A basis of support formed above $1180.70 will provide confidence and whilst the momentum indicators continue to improve the outlook will become harder. Previously I have been a constant “sell into strength”, but the configuration of the momentum indicators suggests there could be something more in the rebound. Stochastics are rising strongly now, MACD have given a bull cross.
I see two important near term factors needed for me to back this as a recovery. A move above the psychological resistance at $1200 and what would also be key for me would be the RSI moving above 60 (which was where it got to in mid-October before the sell-off. The other factor is not to get too carried away quite yet, as the move has only unwound the price back to the falling 21 day moving average. If the price begins to consistently trade back below $1180.70 then the recovery will be threatened again.