"Spot gold prices continue to consolidate after an impressive 30% rally from the December 2015 lows. Chart 4 shows price is sitting on support at a year to date trend line. A close below this suggests a correction to follow. However the last few corrective moves have been bought at 1300. And so 1300, in our view, must break to have a higher conviction of a decline and may be where the stops are.

Longs have long been stretched - it could be fast A break below 1300 is tactically bearish and implies a correction to the 38.2% retracement of 1250. A larger shift in positioning could lead to 1210. This year dips in gold have been bought. Near term macro events in Q4 could continue to result in buyers of gold on the dip.

Gold Q4 seasonals weak in short term, sideways long term Gold prices have had a tough time during Q4 for the past five years. However during the prior 10 and past 30 yearsl, the trend is range bound and choppy".

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