Gold Starts The Week With a Sharp Decline

Gold was higher due to short covering in overnight trading but has made a sharp pull back, below 1,800 as trading in the U.S. got under way. Stochastics and the RSI remain bearish hinting that a short term top might be in or is near. The operative word here is....short term. See our post September 14th.

Marc Ground, commodities strategist at Standard Bank, says "The resumption of a decline in gold speculative longs...indicates the increased caution with which participants are approaching the gold market".

If December extends this month's decline, the reaction low crossing at 1705.40 is the next downside target. Closes above last Wednesday's high crossing at 1848.20 would temper the near term bearish outlook.

First resistance is last Wednesday's high crossing at 1848.20. Second resistance is this month's high crossing at 1923.70. First support is last Friday's low crossing at 1765.40. Second support is the reaction low crossing at 1705.40. Golds pivot point for Monday morning is 1801.70.