| Jan 24, 2013 05:05PM GMT |
After stalling at the resistance area of 1694-1698 for a few days, then forming what we identified as a potential bearish rising wedge pattern, gold sold off Wednesday as the wedge pattern resolved itself with a break to the downside.
This is always the most likely outcome from this pattern and our subscribers were alerted that the pattern looked to be playing out in advance of the break.
Support lies at 1673 (Jan. 18 low), 1670 (the 38.2% retracement of the rally from 1625 to 1695) and below that further support can be found at 1666 (Jan. 17 low) and 1663 (200-DMA).
We will look to re-open a long position at the appropriate time, with our subscribers the first to be alerted when a favourable set up unfolds.
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