Make Kitco Your Homepage

Gold Prices And The Yo-Yo Effect

Commentaries & Views

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

Gold goes up, and gold goes down as it continues to test support and resistance. The pattern and footprint are clear; it appears that gold is consolidating between $1,280 and $1,290. Eventually it will break out of this range, but which way is still the question.

The current trend in gold is lower, which means the probabilities suggest there is more room on the downside. As we know, markets don’t announce themselves and we can only base our assumption on price action. The current price action is confused, which is why we continue to see rallies fail and sell-offs bounce.

We remain long-term bullish, which is an easy call based on history, but in the short term anything goes and if gold can’t hold $1,280, there is a lot of room to the downside. The Fed report on Wednesday could be the catalyst to push gold up and start the next uptrend or break it down, continuing the current downtrend. This action suggests being neutral and waiting for the footprint to guide us. The lean has to still be bearish until gold can close above $1,290.

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.