Gold: A three week uptrend is being severely tested this morning

London (Aug 10)  The bull rally on gold was already beginning to stumble ahead of Friday’s payrolls report, but the risk positive/dollar positive report has finally started to see gold dragged back. After a loss of -$28 on the session, there is a real risk of this turning into something bigger now. How the market responds in the coming days to the price pulling back around $40/$50 off its highs will be important as to the near to medium term outlook. A fall back to $2015 has stabilised initially today, but if the selling pressure ramps up again to breach this reaction low, then the momentum in a correction could begin to develop. If one strong negative candle turns into another, then the market could start to see some greater profit-taking. A three week uptrend is being severely tested this morning (coming in at $2031). There is effectively now a small topping pattern that would form and be confirmed below $2009. This would then open for a deeper correction back into the $1940/$1980 consolidation band. As the market consolidates early today, there is initial resistance at $2036 and then $2048 to overcome for the bulls to get back on track.

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