Uncle Ben and his merry men shocked the currency world with the Fed minutes yesterday. In the minutes, there is dissension in the ranks on the effectiveness and potential consequence of qualitative easing.
What could this mean? Possibly an earlier end to the Fed's aggressive bond-buying program. This sent the dollar up quickly against all major currencies, thus dropping commodities, including gold. Early this morning, gold ran stops below December's $1636 low, putting in a low of $1626. Currently, the market is back above $1630.
Yesterday's momentum started to point down below $1670, right before the FOMC minutes aided a sell-off that ran stops below key levels last night. If gold manages to close above $1655 today, a key pocket last week will help kill the downward momentum. But below the $1636 to $1633 level, the next support comes in at $1598 to $1600.
Bottom line: Gold is trading like a currency -- so act like a currency trader and use your chart! A close below $1636 opens the door to a lower trade.