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The gold markets gained during the Monday session, but it must be said it was a very weak rally. While the most recent down move in this market has been stifled at a higher level than the previous one, we still are ready to call this an uptrend at this point in time as we are still stuck within the recent consolidation area that extends all the way back to the beginning of summer.
The $1640 level is the top of this recent consolidation area, and this is where we would focus on in order to get a better buy signal. As for the lows, we see the $1540 level as a support area in the same consolidation pattern. We should also point out the fact that the $1500 level is supportive as well, and we also believe that it is the point at which the trend changes. As long as we stay above that particular price, we are more apt to buy this market than sell it.
In the meantime, we think this market is going to remain range bound but do want to wait for our buy signal to get involved. We do believe eventually the market breaks higher, but in the meantime we are still in what we would consider the summer range. There are far too many bumps in the road ahead, and as such we want to break out of consolidation before getting too involved.