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Gold Breakout - Real Or False?

Commentaries & Views

Gold made a monster move on Friday, breaking out by pushing toward the $1,300 level. This morning gold is higher once again, trading $1,300 at 6:30 a.m. EST. Is this breakout real or false?

More than likely, this will be a false breakout as gold closed Friday a little overbought at the top end of the pattern on heavy volume. We expect one of two things to happen here -- gold will continue higher and confirm the breakout or it will fall back into the consolidation pattern it has been in for weeks.

The healthiest move would be a small failure, with gold hovering around $1,300, building momentum to make the next big push to $1,340. We are watching $1,290 as a new level of support and are still buyers looking for another push to the upside.

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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