The battle line for gold is the $1,800 level.
Gold held strong through last night’s trade hitting a new high of $1,798.10. But it is starting to seem that gold is hitting a wall at the $1,800 level. The price action is similar to when bullion was trading in the $1,600, and back then, it took a massive short covering rally to make meaningful move higher.
This morning’s nonfarm payrolls data showed slightly more jobs created than expected and an unemployment rate that fell to 7.8 percent. That nugget of good news have put initial pressure on gold that took out yesterday’s low.
A close back above the $1,790 level will be bullish and a close below $1,783.50 will trigger consolidation while a close below $1,772.30 will be very bearish.
So here’s the game plan:
Above $1,790, stay long.
Below $1,780, sell.