The next week or so may well be crucial for the future direction of gold, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.
Dodd notes that the price of gold will soon meet the 1180.5 support, which held when tested over the last year. Should 1180.5 fail, Dodd expects an acceleration of downward momentum towards minor support at 1131.24. Beyond there, the next key level is some way below at 1045.
To the upside, Dodd says that 1226.5 is a key resistance level on both the weekly and monthly charts and until that level is broken Gold will remain in a medium-term downtrend. As such, Dodd remains short but is adding a stop/reverse on a clean break of 1226.5.