Gold markets have broken down to the $1203 region, before bouncing slightly. However, this is a market that looks as if it is hell-bent on testing the $1200 level underneath, an area that is a large, round, psychologically important number. If we were to break down below the $1200 level, the market could go much lower, perhaps reaching down to the $1190 level. However, if we turned around and break above the large parish candlestick during the day with high-volume, that could send this market looking towards $1215 level, possibly even the $1220 level.
A break down below the $1200 level sends this market looking towards the $1195 level, followed by the $1190 level. I think the US dollar is going to continue to throw the gold market around, and at this point there is a lot of confusion around the world. Gold markets have been very tough to trade for some time, so I don’t think that’s going to change anytime soon. If we do turn around and break above the $1220 level, then I think Gold will go much higher. Otherwise, I think we remained somewhat range bound, with the $1200 level offering a bit of a focal point for traders in general. Choppy short-term trading is probably about as good as this going to get if you are not buying physical silver or at least trading small quantities of the CFD market. The volatility is here to stay I believe.