Gold: Support at 1291.70/1280, resistance at 1300/1302

New York (July 16)   That is the thing with gold, there tends to be a period of almost inactivity for several days and then suddenly a burst of price action which has seen gold shed $43 in just two days. The manner of the sudden bearish downside break below $1306 support and then instantly below the $1300 psychological support suggests that someone has unloaded a large holding and now taken out a lot of stops around $1300 in the process. The technical outlook has taken a hefty blow, however the support of the 144 day moving average (at $1291.20) has again been used as a low. This is the only factor that has saved me from turning negative on gold again. The low from yesterday at $1291.70 now becomes a key near term support as there has been a degree of buying pressure that has re-entered in Asian trading today. It will be interesting to see how $1300 is negotiated by the bulls as an instant move back above would be positive, but the old support at $1306 now becomes new resistance and this could cap the gains. With the sharp losses of the last couple of days still fresh it may be wise to let the dust settle before seeing if the outlook is now going to put further pressure on $1291 and the 144 day moving average and there is going to be a move back towards the 1280 support area.

Souce: FXstreet