Gold Bears dictating trend
Gold (XAUUSD) has come under increasing pressure with today the third successive day of value being eroded from the precious metal. The losses here are not significant in terms of dollar value – we are looking at about $25 over the last few days and nearer $40 since its high on Feb 20, but this is still not a good sign. We’d expect to find support in the $1275-$1300 area, but the sheer consistency of bearish sentiment is something of a concern given the scarcity of Gold and its importance in the manufacture of global technology, as well as the safe-haven aspect for those who aren’t trading derivatives. Our assessment at this stage is that there’s no real reason to try and fight the trend, but to sit back and see whether this movement is going to take us anywhere significant. A close above $1375 would invalidate the negative trend but it’s difficult to imagine what sort of event would be required to trigger such a swift and important change in sentiment.