Gold slips

Gold is a touch weaker this morning, but the selling pressure has been relatively muted so far. Gold continues to show great resilience as it has managed to push higher despite the strength of the US dollar. The current leg of this rally has been going since mid-December, and in an encouraging sign for the bulls, all pullbacks have proved to be quite shallow. This stands in stark contrast to gold’s behaviour last year where pullbacks were often brutal – sharp and protracted. Tuesday's break above resistance at $2,720 was impressive, and this area should act as intermediate support for any pullbacks. The chart looks constructive, as does the daily MACD which indicates continued upward momentum without being overbought. Nevertheless, prices will have to correct lower at some point. The question is whether gold can take out its record high of $2,790 from October first, or if it experiences a more significant pullback before then?