Gold Oversold And In Danger Of Breaking Down
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(Kitco News) - Gold is lower again this morning and last weekâ€™s rally to $1,340 is a distant memory. The only thing that can help gold here is the oversold conditions and a dead-cat bounce. The pattern in gold is ugly, making lower highs and lower lows. Now, $1,300 is the key level that gold must hold or $1,240 is in the cards.
There are so many things that are in play here when it comes to the metals. The dollar is gaining strength, the commercials have one of their biggest short positions and the pressure is mounting. Momentum is certainly to the downside
This action is a creation of the Fed and central banks around the globe as they continue to manipulate interest rates and the U.S. dollar. This manipulation is the only thing holding gold at these levels. We expect the Fed to lose control of the dollar, which should put pressure on gold. For now, watch the $1,300 level. If that fails, $1,240 is coming.