Gold markets broke down a bit during the trading session on Monday as traders came back from the weekend. There is a lot of concern with Turkey, and of course this scent the US dollar higher. This has put a lot of negativity in the precious metals sector, and of course Gold isn’t privy to any type of protection. Breaking the $1200 level is significant, and at this point I think the next support level is the $1140 level, and then a much more significant support level at the $1000 level. I would be more than willing to buy an absolute massive amount of gold down at the $1000 level, and I think if you are patient enough, you may get that opportunity. However, if we turn around and break above the $1205 level, that could send value hunters back into the market.
I believe that the market is getting a bit oversold though, so I would anticipate some type of bounce. As bouncer should be sold unless we break significantly above the $1200 level, and I think that’s how most of the market will probably be paying attention. Obviously, this is headlight driven but we have been in a pretty negative market for gold for some time, and this is simply more of the same. Over the course of the next couple of days, I suspect that we will have several different opportunities to short this market as it has been so volatile.