"Looking at the daily Gold chart for the last 2 months the regularity of the uptrend has now been broken with a lower high posted on 17/03 and the price has just dropped under the last low of 12/03. Also the chart pattern looks like a head & shoulders pattern with the neckline broken yesterday suggesting a test of the 1045 low posted on 5/02. Any comments?"

Eoin Treacy's view Thank you for your insights. Gold continues to range below the January high and has had a downward bias over the last few weeks. It has posted three lower rally highs since peaking near $1200 and needs to sustain a move above $1150 to indicate demand has returned to dominance.

While we tend to avoid terminology such as the head and shoulders, I agree that if one were only to look at the last two months you could see the pattern. If you look at the last four months, you could just as easily see an inverse head and shoulders where the neckline is in the region of $1150. (Also see David's in Comment of the Day on March 17th). Volatile ranging trading activity, such as we are currently presented with, makes it relatively easy to make a bullish or bearish case while the trend has at least temporarily become inconsistent.

Nevertheless, gold has sustained the break above $1000 and continues to hold above the 200-day moving average. Provided these consistency characteristics remain intact we can continue to give the benefit of the doubt to medium-term upside.