Pro: Here's How I'm Playing Gold
Gold has ceased to be a precious metal; it's now a market mystery that continues to perplex traders and analysts alike.
After convincingly moving below the major support at the 200-day moving average on Friday and closing below $1,660, gold has to start the week. That's not good as gold is having trouble breaking through key technical levels. One would think with all the central bank money printing, bullion would get more of a bid. Not the case, however.
So what are the levels I'm watching?
I still view the line in the sand at $1,641. A close below that level will likely send the market to $1,590. Traders and investors alike will look to the U.S. Federal Reserve's and gross domestic product data Wednesday for guidance. Additionally, there will be jobs data Friday. Remember, the Fed has tied its easing targets to the employment rate, so a strong report could be bad for gold as investors will interpret a positive number to mean the end of easing. With gold already finding a path of least resistance lower any doubt that the FOMC will halt their current policy will send gold lower in a hurry. However, in the bull camp, a close back above $1,675 will neutralize the sell-off. But we'll need to see gold trade above $1,682 before we can declare any type of bullish reversal. No trade set-up at this time, Make sure you look for our trade alerts though out the day.
Resistance - 1,661.9**, 1,675, 1,678, 1,682-84***, 1,688, 1,696-98***
Support - 1,653.4***, 1,641-42.5**, 1,633-36*, 1,626*1,590
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