Monetary easing by Federal Reserve and other central banks around the world has been one of the main catalysts for the movement of gold in the last weeks. The precious metal is trading just below $1700 as we are writing this.
My technical metrics as well as the descending line dating back to the October highs (1798) and November highs (1755) suggest a short or flat position on the metal.
A break below $1685 (December low) would deteriorate the technical picture as the precious metal has defended this level a few times in the last weeks.
Loss of the 1.685 support on a closing basis exposes gold to 1.672 (Nov low) and to its 200-day moving average of 1.664.
The technical picture will improve a lot if gold overtakes 1.725 (December high). However I expect some serious selling pressure to occur at this level, with the next upside target being 1.755 (November high).
For the time being we are maintaining a short to neutral market position in gold with close stops and wait for an exit of the metal from the 1.685/1.725 range in order to get a clearer view of the trend and adjust our positions accordingly.