Bears capitulate as gold grows above 1,120

Uncertainty that is being created by decisions of the PBOC is increasing demand for safe-haven assets. Gold is of them, as it managed to jump in value for a third consecutive day on Wednesday. Yesterday bulls were successful in sending the bullion above three important technical levels, including weekly R2, monthly PP and weekly R3. The next resistance is capable of bringing back the bearish momentum, as a sell-off may begin around the 2014 low at 1,131, which is accompanied by Jul 20 high. Unless this mark is violated, our short-term outlook towards the yellow metal is fairly negative.  

SWFX sentiment with respect to the precious metal deteriorated again, as recent market volatility sent the share of bulls down from 59% to 58%.