Following the May 1, 2013 Market Minute titled "Has gold's bounce reached the peak?", the yellow metal has stalled at the $1487-$1485 resistance level for almost two weeks. Today's trading suggests the main downward trend is still in force and that another rollover maybe starting.
Gold's trading direction changed in October 2012 after the metal reached $1798.10. Since then, gold has steadily drifted lower with a series of declining price lows.
In early April, a dramatic drop occurred with gold breaking the key support level of $1550. Now the rebounding bounce, which developed in late April, is losing momentum.
Cycle models are implying a high probability of another low developing in late May to early June. As the trend, since October, has been down, the probability of the next low at or below the $1321.50 is great.
Bottom line: Gold's trading direction has changed. The metal is no longer going up. As gold trades on an average 6-week cycle, the next low should arrive in late May to early June.
