Gold's medium term trend takes a hit

Gold Medium Term– NEUTRAL/Bullish

Moving Averages 1254-1288 (Bullish)

The close below 1272 last week has gold medium term in damage control. We are below the blue moving average and just barely held the red average on the Friday close (by 1 dollar). A weekly close below 1236-1242 sets up for 1172-1212 area.

On the upside, we need a monthly close above the 2011 downtrend line of resistance at the 1344-1352 area. It has now been 14 weeks since the bull/bear battle of the line began. For now, they have been the victors.

Clearing the 2011 yellow downtrend line would have been huge but as we suggested, the rally had gone as far as could without leaving the bear market channel.

We continue (as we have since July) to favor a medium term pullback is in play as those are the odds. That Fibonacci 1272 area has been taken out and the moving averages are near the edge of giving way. If they do then the 1200 area (give or take 25 bucks) is the next area to watch. Overall, there isn’t LINE support under the moving averages until 1150-1172. Odds favor the medium term downtrend is not complete IF WE GET A WEEKLY CLOSE BELOW 1236-1242.