Richard Perry
Independent Analyst
The bulls will now be asking themselves, how will the gold price react to the first really corrective day for the past week and a half? The initial observation is that the pivot level around $1180 is once more doing a job, however the momentum indicators have just lost a bit of impetus. The intraday chart shows that volatility has returned to the gold price in the past 24 hours. Two key events have driven this, with a reaction to the latest polls in the Swiss Gold Initiative referendum along with the minutes from the latest FOMC meeting. I still view this pivot level around $1180 as being critical for the near term outlook. If the bulls can hold on to it then there will be an improvement in the outlook. However if the support is lost then gold could quickly pick up momentum to the downside again. The outlook is subsequently mixed near to medium term. Resistance comes in at $1204.70, with support at $1270 protecting a further setback towards $1246.64.
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