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Gold Wars

Commentaries & Views

The bears are back, and the pressure is on gold. Tuesday saw gold get hammered and trade as low as $1,402. This morning the pressure is on again and gold traded as low as $1,401. The bears are getting ready to celebrate as they will try and push gold through $1,400.

Traders have two choices here -- they can panic and liquidate their longs, or they can look for a support level to add to current positions or open a new long position. The weak hands have already puked out, leaving this battle to the real money, a good old-fashioned battle between the bulls and bears.

Based on the prevailing trend and the technical positioning of the charts, we would be buyers. The pattern suggests that gold is more likely to break out to the upside than break down. The key level to watch is $1,390, as holding above there keeps a run to $1,450-$1,500 in play. It looks like the bears have overplayed this hand.

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.