Gold falls hard during Tuesday rout

Gold markets broke down rather hard on Tuesday, losing over $10 by the time the Americans took over, but we are currently sitting just above the $1300 level, an area that is important as it is a large, round, psychologically significant figure, and of course has seen a lot of resistance and support both over the last several months. I think that if we do break down below the $1300 level, then we go looking towards the $1275 level again, which of course has been important as well.

A lot of this is going to come down to the US dollar, and the fact that it has been strengthening. Higher interest rates in America of course are horrible for gold longer-term, but there are enough geopolitical concerns out there that you should not give up on the yellow metal altogether. I think low leverage, or better yet no leverage, is probably the best way to play this market. Short-term pops and rallies from this region would make sense, so futures traders might be looking for short-term scalps as we get closer to the $1300 level. Obviously, those bounces could be quick, and you should be quick to take advantage of any profits that you get, as things could turn around rather rapidly. I think that if we break down below the $1300 level, the next $25 should be to the downside, offering short-term selling opportunities. Expect volatility regardless.

Price of Gold Video 02.05.18