We continue to be negative on gold and expect to see one more push down to our target zones. We still believe this market is headed down to test the $1,620 area, which is close to the 61.8% Fibonacci retracement level of $1,617.34.
With a Score of -75, this market is in an emerging trend to the downside. We are expecting gold to be on defensive for the balance of March. With two of our Trade Triangles negative, we expect this market to move lower. Long term and intermediate term traders should be in short positions in gold with appropriate money management.
But gold closed higher due to short covering on Monday. The mid range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.
If April extends the decline off February's high, the reaction low crossing at 1609.00 is the next downside target. Closes above the 20 day moving average crossing at 1714.20 are needed to confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 1678.10. Second resistance is the 20 day moving average crossing at 1714.20. First support is last Wednesday's low crossing at 1634.70. Second support is the reaction low crossing at 1628.70.
Check out our latest Video, Market Analysis and Forecast for the Dollar, Crude Oil, Gold, Silver, and the SP500
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