GO
Loading...

How to trade the gold bounce: Pro

Monday, 22 Jul 2013 | 9:55 AM ET
An employee returns a box of One kilogram gold bars to the safe, from Swiss manufacture Argor Hebaeus SA.
Akos Stiller | Bloomberg | Getty Images
An employee returns a box of One kilogram gold bars to the safe, from Swiss manufacture Argor Hebaeus SA.

Gold is rising Monday, as weak shorts cover above $1,300.

After closing on Friday with its second weekly gain in a row, gold was able to begin this week with a bounce, running stops above $1,300 and trading up to the next major resistance with a high of $1,322.90. This high is against the initial April 16 low of $1,323, which is a major retracement level.


Traders brawl on gold
Anthony Grisanti and Jeff Kilburg have a fierce fight on where gold's going next. "Are we looking at the same chart?" With CNBC's Jackie DeAngelis.

With Fed Chairman Ben Bernanke emphasizing again last week that it is too early to make a call on curtailing the Fed's bond purchasing program, investors were able to turn to gold and find value below $1,300. Additionally, as oil costs rise, inflation—which has not been an issue this year—is showing signs of picking up. This sparks an interest in gold as an inflation hedge.

(Read more: Bernanke doesn't understand gold, should we?)

With that said, only a close above $1,323 to $1,326 will help neutralize the metal's bear market. Support will now be seen at $1,297 to $1,300, and if the market does not close above here, the current move higher will be seen as a failure.

Rich Ilczyszyn is founder and CEO of iiTrader. Follow him on Twitter @iiTrader.

Watch "Futures Now" Tuesdays and Thursdays at 1 p.m. EDT exclusively on FuturesNow.CNBC.com!

Like us on Facebook! Facebook.com/CNBCFuturesNow.

Follow us on Twitter! @CNBCFuturesNow.

  Price   Change %Change
GOLD AUG13
---

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.