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Gold Sell-off - True Or False?

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Gold broke through support Wednesday and closed underneath the key $1,320 level. This brings the question – is this the start of a much bigger sell-off or a false breakout to the downside? True or false?

There is no way to know at this point; however, today will be the key day in helping us to decide. At 4 a.m. EDT, there was selling pressure taking gold even farther away from the $1,320 level, and gold was trading at $1,312 on moderate volume.

Another close below $1,320 would start to cause some concern that this leg of the rally was over. The keys to watch today are $1,300 support, volume and whether there is two-way price action. The biggest concern will be if there are no significant rally attempts. We are still long-term bullish but concerned the next day or two, depending on the actual trading action.

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