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Could I Be Wrong On Gold?

Commentaries & Views

Being a gold bull since July has been profitable and easy to stay long the yellow metal. The run over $1,300 and then the failure to hold is now starting to cause some heartburn and concerns, with gold struggling to hold the key support levels. Is gold starting to break down?

Looking at the long-term pattern, we now have a major concern at the $1,265 level. That level was violated Tuesday, with gold trading down to $1,263 before bouncing and closing at $1,266. Today gold is trading at $1,270 but our concerns are based on a weekly chart; a close on Friday below $1,265 could spell trouble.

The next three days are crucial for gold. If it closes below $1,265 on Friday, that would bring $1,200 back into play, if not lower. We are buyers at these levels but a close below $1,265 on Friday would cause us to liquidate our longs and possibly short this market. We are very nervous bulls but will change our minds on a close below $1,265.

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.