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Gold looking to test support

Commentaries & Views

After testing the top end of the range last Thursday and Friday gold has turned south and appears headed for support. The wicked consolidation continues and it can last for an extended period of time before deciding the next big move.

Gold made a double top on Thursday and Friday which looks to be the top for now. Based on December futures, gold appears headed for the bottom end of the range which is $1,480 -$1,490. Look for some support at $1,500 before ultimately testing the lower levels.

At some point these markets will breakout either up or down. We are still short, expecting the prevailing downtrend to continue. Gold had made a subtle change over the last few weeks which slowed the move down. As we wait for consolidation to resolve, we will stay short until there is a reason to buy.

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