Hello. This is Ashraf Laidi, from CMC Markets, and welcome to another edition of CantosCharts.

We are going to talk about - you guessed it - gold. Now, we talked about gold many times, and we showed the of the bearishness in gold. We went all the way to 1043. We're still expecting further downside, but here, this daily chart in gold, it shows you that there is further room for some downside here. There are many fundamental reasons here, as the Federal Reserve gets ready to go into the exit strategy, reduces some of the liquidity, and maybe some risk aversion that is actually contrary to what many people think when risk aversion sets in and risk appetite goes down. Actually it is bad for gold. We can probably talk about that in some later editions.

But basically the short answer to that is that when the stock market goes down, fund managers are sitting on all these losses. What are they going to do? They're going to start to sell some of the winners, and hence some of the gains they made in gold. They start to take some money off the table.

Gold is hovering around 1,118, 1,119. We cannot ignore this failed retracement here, this failed high here, which was basically around mid-January, just around 1,158, which was really the 61.8 per cent retracement of the big decline from the 1,227 that we saw in December the 2nd all the way, all the way down to 1,0

But we come back up, and then we come back down. And then we had a failure here, which is early Feb. And then we have a failure here, which is mid-February, around 1,117, around 1,118.

So basically, the levels that you're watching here, the key retracement levels, there are two of them. You're looking at the high here, and here, which is around 1,118, 1,119. And when I say 'you're looking for' that means that if the market closes above that level, that means that we are likely to go higher.

But the key level, ladies and gentlemen, that I'm looking for is the 1,133, 1,134 or even 1,135 level here, which is basically not only a 50 per cent retracement of the all-time high to the early Feb low, here, which is a 50 per cent retracement. But as you can see, it acted as a proximate level or a territory for a congestion level around here - 1, 2, 3, 4, 5, 6, 7, 8. So around two weeks. And basically, yes, we did go up above here. We closed above here. But then we came back down.

The situation with gold, it can never give you a very clean, accurate level respect of technical analysis. There are exchange traded funds playing. There are hedge funds playing. There are futures playing. Central banks, believe it or not, are playing in this market. There's a lot of forces out there, and there is a 21-year-old graduate, or 22-year-old graduate who knows how to dabble with gold, goes to ETF. Or he's got the 75-year-old retiree who can dabble into gold. So many forces in there.

But we've got to step back. Take a deep breath. And see where the pattern is. See where the gold is unable to go. See where gold is wanting to go.

Last week, there were some rumours that the Chinese wanted to buy the second 200 tonne sales by the IMF, that IMF had to sell offer. There were rumours that Chinese were going to buy. So gold went up. But is that enough?

So basically, we're still quite bullish - we're still quite bearish here. There is no 200-day moving average in this chart, but the 200-day moving average, ladies and gentlemen, lies around 1,025, 1,030 level. So that is well below the 1,041 low that we saw.

Looking at the charts again, this is not an evidently bearish chart. Yes, there was a trend line here. But guess what? And we did break it. But this trend line here, and I don't know if you can it from the laser beam, but there is a trend line here that we broke above it. But guess what? We broke and then what happened? We were unable to sustain these highs.

So this market may want to have another go. May want to have another go at attacking 1,123, 1,120. But the key, this stands in its way. And again, the bullish story for the dollar has a lot of legs, not only on the heels of bad stories whether Greece or the sterling or the higher yielders that could come under attack under risk aversion, but there is some positive stories from the US, meaning, yes, there are a lot of problems with the US economy as far as the fiscal situation, and maybe a renewed jump in the unemployment, but you cannot ignore when the Federal Reserve tells you that we are looking for an exit strategy. It gives you a laundry list of the ways in which they could get out some of the liquidity. And that is 10-times more hawkish, more positive for the US dollar, than what the Bank of England is doing, which is basically telling you that they are thinking about opening a door for probably renewed quantitative easing. Or the ECB that has no choice but to keep liquidity afloat, just to avoid any contagion if this deal with Greece does not work out.

These things are not very, very good for gold. And that's why we're still very long-term bullish gold, as long as gold does not go down below 900 - yes, 900. Not 1,000 - 900. But we could go all the way down towards 1,000 and even 980 in this up-leg of the US dollar.

This has been Ashraf Laidi, from CMC Markets. And this has been CantosCharts. We look forward to seeing you next time. Bye-bye.