Gold rally halts
Yesterday’s rally in gold came off the back of a similarly sharp downturn last week. The overall wider bullish view remains in play and as such we were looking for longs despite recent weakness. Certainly the $1338 neckline break was a strong signal yesterday, with price coming back to retest this level following the breakout.
We have since seen a strong move higher, with price currently consolidating from an overbought position. It does not make much sense to add any new positions from here unless we receive a signal that a pullback is not in the offing.
As such, an hourly close below $1351 would point towards a more protracted move lower, with an hourly close back above $1355 needed to provide a resumption of the uptrend.