Our last update on the 23rd January continued to highlight our longer-term bullish stance on Gold.
The sell-off since the all-time high in 2011 at 1921.5 has attracted buyers back to the market since last year’s 1046.2 base, which is a key 50% pullback to the entire 2011-2011 ten year bull-run.
A rally in 2016 has stalled ahead of thick cloud cover, but losses into last year’s close have continued to attract buyers on the dip. This has seen a sequence of lower monthly lows being ended in January which is positive for sentiment.
The market has rallied into further resistance this week at 1242.6, a previous weekly low made in October and ahead of 1255.9, a 62% recovery to the losses posted since November’s high. The potential for a deeper pullback from these levels is high, so although there is no bearish reversal pattern we would lighten up on longs and look to reinstate on the dip towards 1181.5, January’s Marabuzo line.
The risk remains with selling below December’s 1123.0 base.
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