I was disappointed on Friday that the correction went as far as it did, in hitting a 3 week low at $1228. I also considered whether a breach of the support around $1238 meant that the medium term bulls had lost control. The subsequent development on the daily chart gives me hope as the gold price has formed support. The daily chart shows the Stochastics are now beginning to turn up again (and are close to a buy signal), the MACD lines are looking to flatten above the neutral line and the RSI is looking to turn up from the low 40s (which is what it did during the key lows of November and December. It could now be that the old support between $1252/$1255 becomes the new resistance and the buyers are stopped in their tracks. However a break above this resistance band would be an interesting sign once more. A key signal would also be the breaching of the downtrend that has formed in the past 3 weeks (which currently comes in around $1264).All is not yet lost for the medium term bulls. I see a breach of the support at $1222 confirming the bearish control once more.
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