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Gold Fails To Break Out, Now Under Pressure

Commentaries & Views

On Friday, gold was breaking out big time to the upside. The explosion took gold to $1,362 before the sellers showed up, and gold fell below the key breakout level of $1,350. This was an ugly day and could have signaled a key reversal to the downside in gold.

This morning the pressure is on once again, with gold trading on the lows of the overnight session at $1,337. It is 5:30 a.m. and gold is under pressure. As long as gold can hold the $1,302 level, it should be able to go higher and take out the recent highs to get to our next target of $1,400.

As we have written many times, the congestion or consolidation periods are the greatest time of uncertainty and drive traders and investors crazy. This pattern will more than likely change on Wednesday when the Fed reports its decision on rates. Until then, the best trade is that of observation.

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