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Surprise Gold Holds Support

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I hope no one is surprised that gold held support on Tuesday. As ugly as the day was, gold managed to climb back over $1,320 after trading below it much of the day. This was consolidation at its finest with many false breakouts.

The torture of consolidation always proves the toughest pattern to trade, as the bulls and bears keep switching direction, punishing the momentum traders. This is why consolidation is also known as the greatest time of uncertainty.

The phases of the markets repeat over and over again and eventually break out to a trend. The metals will break out again and based on the prevailing trend, the move should be higher. As traders and investors, it’s our job not to get chopped up when the consolidation is in play. We are bullish the metals but will wait for a move out of this pattern.

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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