Following on from my potential trade idea yesterday, on the hourly chart, stochastics suggested gold is oversold and a move back above 20 here could indicate a move on gold towards $1276. On the downside, uptrend support drawn from the June 5 low is seen at $1268, so the bulls will want to see this level hold.
It’s worth indicating the 55- and 200-day moving average converge at $1287 to $1286, so a break of these averages and the April downtrend could be fairly important.
It’s interesting to see a sharp increase in the correlation between Brent and gold prices. The five-day correlation has increased from a negative print a week ago to now stand at 0.72 (or 72%). There haven’t been any new issues to push energy prices higher, although constructive comments from John Kerry about working with Iran have been noted.