Pro: The Key Levels for Gold
iiTrader Founder & Chief Market Strategist
Where is the price of gold headed?
The precious metal got a much anticipated boost over major resistance on Tuesday. Concerns and comments out of Germany help gold push through the $1,585 to $1,588 wall, bringing it to a high of $1,597.6 that it reached Tuesday morning.
(Read More: Gold Edges Up Toward $1,600 on Eurozone Concerns)
Overnight, we have seen a very tight range, but gold is currently finding support above previous resistance at $1,588. A close below this level will be discouraging. Meanwhile, a retest and follow-through higher will put shorts on their toes at the $1,600 level. Going forward, a close above $1,597 will likely encourage further buying.
Nothing has changed over the last 24 hours, and traders still eye the U.S. Federal Reserve's Federal Open Market Committee meeting next week for a further signal in this market. Look to play the range while trading Wednesday and note that the $1,585 to $1,588 level should come in as solid support.
(Read More: El-Erian: Fed Faces One of Its Toughest Jobs Ever)
Buy against the support level of $1,588 the first time down — or aggressive traders could buy the breakout above Tuesday's high of $1,597. However, use caution if the market doesn't follow through with higher prices quickly, and watch out for intra-day reversals.
If you are long stay, with the trade if we close above $1,605 on Wednesday.