Gold Trades Below $1,280; Now what?
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Tuesday was another ugly day for gold. As we wrote yesterday, $1,280 was coming. Gold traded as low as $1,275 before settling just below our key level. This morning gold is slightly higher, trading just over $1,280. Our expectations are for some consolidating action at the bottom end of the range.
The metals are at key levels and can go either way from here. We are watching the action around the $1,280 level with intentions of buying; however, it is not automatic. We must see how the markets react at these levels, as failure here brings $1,240-$1,260 into play.
To be buyers, we would prefer to see gold consolidate in the $1,275-$1,285 area for a few days to weeks, building a base before we step in. Sharp rallies from here are nothing more than short covering, and we would be sellers. We are looking to buy; however, from here it’s all about the market footprint. Observe patiently. If this is a buying opportunity, there is time to get in. We won’t miss it.