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The gold markets had a very rough week after initially rising, only to turn around and fall flat on its face. The ferocity with the down move on Friday suggests that perhaps we are going to continue to see weakness in this market. On the weekly chart, we can clearly see that the grind the lower continues, and $1550 looks to be rather supportive.
Those of you that follow our reports, certainly know by now we have a "line in the sand" at the $1500 level for the bulls. It is below there that we think this market tends to fall apart. However, we cannot help but notice the fact that a little bit of a descending triangle seems to be forming at this point. It is because of this that we are not as bullish as we once were, and think that perhaps a bigger move is coming.
As long as the US dollar continues to attract inflows for its "safe haven status, it is hard to think that the gold markets would do well. With central banks around the world easing right now, there is a demand for gold, but just not predicated in US dollars. With this in mind, we are essentially stalking unless we see a daily close above the $1650 level or a daily close below the $1500 level. In the meantime, we fully expect this market to be very choppy area