As stressed in previous gold market analysis, the $1700 per ounce price point for gold is taking on increased significance, particularly following the posting of an isolated pivot high on 22nd January which saw gold touch an intra day high of $1695.90. This aligns almost exactly with the isolated pivot high of 2nd January at $1695.40. These failures have been reinforced virtually every day this week and further confirming the current weakness in gold.
With the February contract closing at $1669.90 in yesterday's physical trading session, this short term weakness in the price of gold may see the precious metal move back to re-test the interim platform of support in the $1640 price region. Any move past here could also see a further move down to test $1620 where gold bugs will be relieved to find sustained price congestion and a solid platform of potential support.
It is also interesting to note that from a fundamental perspective many commentators are now suggesting a move away from gold and into gold mining stocks, as global equity markets appear to recover.