Gold was quite whippy yesterday, holding $1277 and trading higher, past $1297 toward $1304.
This morning we are off the higher levels and mid range. We have the $1288/85 support to negotiate, and only below here can we see $1277 where all shorts should be covered. If we cannot hold onto this support we can see the market trading lower toward $1270/68 once more. This is where our weekly trend line lives and because of this we should cover shorts.
This area is extremely important and I believe traders should be a bit careful of selling the market down here on the first break. Weekly charts are a little oversold but I will let you know when they start to turn higher. As yet they have not. Currently, our daily charts are still pointing lower so if we do break $1268—well $1266 really—then we can trade down to $1261 followed by $1254 The other point to note is that if we see a close below $1268, we should be aware that the market can go to $1180 over the next few weeks. Resistance remains in the $1305/07 area. We are still tempted at this point to sell into strength looking for the market to continue lower. Place stops on shorts above $1307.