GOLD..

There is an interesting rally playing out on gold at the moment (coming amidst a dollar strengthening). The gold price has left a near term low at $1191 to claw back some of its lost ground. There is still much to do to suggest this is anything more than a bear rally. Yesterday’s peak at $1220 has once more come below the lower reaction high of $1223.10 which needs to be overcome to break the sequence of lower highs and lower lows. The daily chart shows successive positive days although this needs to be caveated with the lack of conviction in the candles of both Wednesday and Thursday which closed below the mid-point of the daily range. The resistance of the medium term downtrend comes in at $1236.50 and for now this is still a countertrend move and I still expect that this move will fizzle out soon with the likely resumption of the selling pressure. For now though perhaps it is best to wait for the sell signals.