Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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.