With a second day of downside weakness seeing the commodity breaking below the 1,365.15 level today, risk of a recapture of the 1,352.70 level is envisaged. This will bring further losses towards the 1,350.45 level, its Nov 26'10 low and subsequently the 1,329.25 level, its Dec 16'2010 low. We expect a halt in declines if that level is tested thus turning the commodity back up again. Its daily RSI is bearish and pointing lower supporting this view. To prevent this from occurring, Gold will have to break and close above 1,392.35 level. This will create scope for more recovery towards the 1,432.00 level with a violation of there resuming its broader bullish long-term structure towards the 1,450.00 level and then the 1,500 level. All in all, though the commodity still holds on to its long term uptrend, it now faces the risk of further downside losses.
GOLD