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Gold Remains Range-Bound

Commentaries & Views

The search for direction continues in gold as the metal stays in a range between $1,305 and $1,328. The precious metal is still preparing to make a big move, and the inability to break out over $1,330 on a weekly chart suggests that prices will be headed lower before they go higher.

This consolidation pattern can last for an extended period of time and although a big move is coming, it’s not imminent. Consolidation is the period that markets spend about 65% of the time in and are the time of most uncertainty. The consolidation period consists of the weak hands and strong hands continually changing places, which keeps that market in a trading range.

In the case of gold, the longer the consolidation lasts, the bigger the next move will be. We believe the next move is lower and gold should test the recent lows. Since markets don’t announce themselves, the best way to trade this pattern is to sell at the top end of the range and be prepared to cover at the bottom of the range.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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