Gold technical analysis
Gold had a great month to start the year but that's something we've seen before. In each of the past three years, gold posted strong January gains only to finish the year lower.
Last January gold gained $102 only to fall $72 in February and it finished the year $250 from the January high.
I think there's a case for gold longs because the Fed will eventually walk back from its hawkish stance and the US dollar will suffer. It started on Friday with Dallas Fed President Kaplan striking a dovish tone.
As always, the trick to a good trade is getting the timing right. If gold eventually returns to the salad-days highs above $1800, there's no rush to get in now.
The monthly chart shows a bit of a reversal over the past two months but for it to be enticing, it would have had to close above $1143 and to be entirely convincing it would have to climb above $1200.
There is a well-entrenched downtrend that broke the 61.8% retracement support level in mid-2015. There's nothing particularly solid about the December lows either.
