The price of gold popped through resistance on Tuesday to reach the next major level that all traders are now watching: $1,590.4.
This was the level that broke the camel's back a week ago and gold continued to trade another $50 lower. Once it reached a high of $1,590.1 on Tuesday, the precious metal quickly backed off and consolidated just above the $1,583.8 level into the close.
(Read More: Gold or Stocks? It Doesn't Matter!)
On Wednesday, gold reached a high of $1,588.5, but the market has little mojo, as it currently easing toward $1,570.
Meanwhile, Goldman Sachs has once again lowered their 2013 gold forecast to $1,545 from $1,610 and to $1,350 in 2014 from $1,490, as they note that although euro-area fears are heightened and U.S. data has been disappointing, gold prices are unchanged over the last month. In February, Goldman reduced their 2013 forecast from $1,810. Nonetheless, we all know and have seen Goldman reduce or raise forecasts in order to find themselves a better entry or exit point, so this should all be taken with a grain of salt.
(Read More: Goldman Sachs Says It's Time to Short Gold)
Due to an accidental early release to Congress and to trade organizations yesterday, the FOMC minutes were released at 9 a.m. today, surprising the market. Traders must remember that these minutes are from the meeting that took place on March 19 and 20 – which, importantly, was prior to the last Friday's disappointing jobs report. Major focus is always placed on dissension among the ranks, but we want to place the focus on the top economists who see a downtick in the economy as a result of sequestration. Although there are Fed governors who see the endless easing coming to a halt at the end of the year, this is not realistic, and the top economists believe that if anything is changed at all, the $85 billion worth of bonds purchasing will just be curtailed slightly.
(Poll: Will the Fed End QE This Year?)
If we continue to see an uptick in U.S. economic data, this will continue to provide a green light for equities, thus taking away the luster of gold. However, if we see a downtick in economic data caused by sequestration, then this is will provide a catalyst for investors and traders alike to step back into gold.
Support will now come in at $1,570, and furthermore $1,566.1 — so a close below here will confirm Tuesday's failure into Wednesday morning, likely initiating a bearish leg lower. A close back above $1,578.9 on Wednesday will neutralize the negative activity. A close above $1,583.8 will provide positive momentum, confirming Tuesday's price action. And only a close back above major resistance at $1,590.4 will be bullish.
Read on for 10 Things You Need to Know to Trade Futures