Gold recovered from a rocky session on Friday to trade back above $1,470 an ounce this morning. After failing to retest the session's $1,484.80 high, gold quickly broke back down, as a fear of failure allowed the bears take control.
The metal sold off in a hurry, running through stops and below major support at $1,455.80 to $1,458.50 an ounce. This brought it to the next support level, at $1,447.20. At that point, investors once again found value and were able to help gold finish the week back above $1,460.
Last week, Goldman Sachs' exit of its short bet on gold, coupled with the increase in physical demand, helped bullion recover from its April 16 low. However, gold will need to get back above $1,500 an ounce before investors get the psychological sense that it has bottomed.
(Read More: Goldman Flip-Flops on Gold)
The range trade that I posted Friday is still what I consider the main trade to be as this market consolidates. Namely, I see the market staying between $1,437 and $1,487.50. Until gold can close above or below this band, traders must play the levels on either end of the range.