Hello and welcome to Cantos Charts. My name is James Hughes from CMC Markets.

Today we're going to talk to you about metals and more importantly, the gold price at the moment.

Now of course gold, for a long time, has been ramping its way up. All we've been speaking about from gold over the last few months or so has been new highs, fresh highs all the time, really not being able to get away from that. Now of course, the reason we've seen such a strong move in not just gold but metals and commodities in general has been the overall USD weakness that we had a for a long time in this market mainly caused by of course the stimulus packages still being in a lot of these governments and still looking at lower interest rates which has been keeping the USD weak, putting commodity and equity markets to the upside and gold has been a major beneficiary of that one.

Now recently we've seen a little bit of a change in that. Of course we've seen the USD get a little bit of support, really help itself push to the upside and gold, on the other hand of that, has stated to fall off a little bit. Falling away from those highs and it has started to fall down to of course, as we've been speaking about over the last few days, some real key downside support levels. We've got that same situation happening at the moment.

Now the key level on gold at the moment is $1,045. That is the big downside support level. It's the 50 retracement level from the last big move that we saw in gold as well, so that's going to be a real key level on the downside.

We've seen it come down, test around the $1,050, $1,045 level and really hold up and push itself higher. Now what we've also got on the downside at the moment is this 200 day moving average. Again, the 200 day moving average is around that $1,045 level at the moment. We've seen it bounce off of that level, continue to go higher.

Now what we've also got in this one is the RSI. For a long time the RSI has now been moving itself to the downside. As we saw, for a long time back up here we were seeing an overbought RSI meaning that this gold price had really pushed its way from what the RSI thinks is as high it could go. Now that's not necessarily always the case. We've seen it fall back lower. It has been stuck within that range for a while. Now we've dropped back down to the 30 percent oversold level. But once we've got down here and it happens to coincide with this key $1,045 level, this 200 day moving average, once we're seeing now a bounce off that downside level, we're seeing a bounce off of the 30 percent RSI level, oversold level on the downside.

Now this is all pointing to in the short-term maybe a little bit more strength if we can hold onto these downside levels and push it back to the upside. Now of course that's going to be a big if. As we said at the start, we're all very dependent on what that USD is doing and at the moment we've got the strength in the USD. So if we continue to see that strength, we may not necessarily see these levels hold on for too long. But it will be a key bearish selling signal if we do get a break of $1,045, a break of the 200 days moving average as well and this RSI coincides with that by dropping below that 30 percent oversold level. They are all going to give us some real key sell signals on the gold price and that's going to be important to look at.

Now further down on the downside, if we do see a break there, of course we've got the $1,000 level. That happens to coincide quite nicely with the 61.8 percent Fibonacci retracement level as well. That's around $1,002. So again, around that level we've got some key downside support. If we see a break there, we've then got $982, a bit of a support level to the downside. So we have got a lot of support as the market falls down. But if the selling is aggressive enough, we could see all these break through. But the key one will be $1,045 and below that, the 61.8 percent retracement level. That's going to be the big one if we do break below the $1,045 level. But these levels are going to be key. It all depends on what exactly goes on with that USD.

Of course, last week we saw the jobs report in the US which didn't necessarily give us too much direction in terms of the gold price straight away, but of course it gave us movement within the USD and that pushed that USD higher yet again because it pointed towards the fact that the economy was turning around and we may be still looking to move out of stimulus and rates starting to move maybe in the US.

Now a lot of these expectations keep coming forward. While they keep coming forward the USD is going to go to the upside and gold is going to remain one of those metals, like a lot of the commodities, which is going to be under pressure. So definitely a lot of downside levels to look out for on this. Of course we spoke about the selling side and what we should do if we see a break of these. We could see these break up and if we do get some more support off of this $1,045 level and it starts to push up, we've definitely got a buying signal on our hands there as well.

So this is in a transitional period at the moment with gold. We can one way or the other, but definitely a break of that $1,045 is going to be the big downside sell signal.

Thanks for watching Cantos Charts. My name is James Hughes from CMC Markets.