Yesterday gold held the lower bound of the rising trend line from Dec last year and matched with an old S&R level at 1272 has bounced back to 1280. No doubt the geopolitical worries this morning are aiding that move but is it time for a break lower?

Adam made a case for gold to fall and this could be another opportunity to use the Yellen speech to scale in at a better level.

Gold daily chart 22 08 2014

Gold daily chart 22 08 2014

The sentiment has turned bearish for next week following bullish calls this week. A Bloomberg survey run August 15 has 14 buls, 7 bears and 7 on hold for this week. Next week the bears are 13, bulls 9 and 6 are on hold.

Demand worries have been behind some of the move lower but Asia is seeing a surge in metal exchange activity such as the Shanghai Gold exchange launching a physical gold exchange next month.

The speculative market is a lot less after the big QE wash out we had last year so demand and supply news is going to take precedent. That’s not to say that the specs and carry mob won’t have a say in moves but more of them could be shaken out as expectations ramp up on when rates start to rise.

Another one to watch this afternoon.