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Gold trade is getting ugly

Commentaries & Views

Gold could be in the process of breaking down. Tuesday’s failure at $1,500 could lead to a turn in direction as well as a turn in sentiment. We will maintain our long position through today looking for gold to retake the $1,500 level. If gold fails again to hold the $1,500 level, we will reverse.

The action in metals has been ugly with five consecutive down days. The fall through $1,500 has caused heartburn and concern. There are still areas of support that we can cling to in the short term and we are ready to reverse, but the sell off has been on light volume, indicating that the weak hands are selling versus a real breakdown ,

If we know one thing about markets, there are sell offs that are based on technical breakdowns which lead to reversals. Then there is the fear and panic variety. The breakdown in gold has been somewhere in between and today will go a long way in determining what sell off we have here. We will hold our longs through today and decide our next move after we see today’s action.

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.