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Can Gold Prices Bounce?

Commentaries & Views

Not much has changed in the gold world, as rally attempts are immediately met at the door by sellers. There appears to be no hope for the metals. Even Vanguard is throwing in the towel on one of its gold funds. All hope is lost…or is it?

Like with any market, the metals markets go through different phases and trends. The trend is down and until there is a reason to believe that has changed, sellers will continue to be the strong hands. There will be rallies which will continue to be sold because of the phase the metals are in now.

However, all hope is not lost. Like all markets, the strong hands will change and the metals will rise again, but until then the only logical place to be is short or neutral and observing. The key levels remain at $1,180 support and $1,240 resistance and until gold closes above or below one of these levels, we will remain neutral and observing.

There are two major announcements this week, and either one can push gold through support of resistance—the FOMC on Wednesday and jobs report on Friday. I expect to see a dead-cat bounce in the next day or two, but until this range is broken, the bears are in control.

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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