Gold markets went back and forth during the trading session on Wednesday, rallying slightly as the Americans were away celebrating the Independence Day holiday. This made for a thin market, so I would not take too much to heart with the move to the upside, but I think we are essentially in a situation where we should be waiting for signs of exhaustion that we can start selling. This is because Gold has recently broken below a major uptrend line, and of course the US dollar continues to strengthen overall. However, in the Forex world the US dollar has given back a little bit of the gains, as it may have gotten a bit overbought and was due for a correction.
I believe that the market will eventually go looking towards the $1200 level, and at this point I’m waiting for some type of exhaustive set up to take advantage of the US dollar being offered “on the cheap.” Overall, I think that the market is one that you need to be patient with, and therefore I think the old axiom of “we get paid to wait as traders” certainly applies to this market.
Overall this will continue to be very noisy market, but I think that the patient and prudent trader will find plenty of opportunities in this longer-term downtrend. However, if we were to break above the $1275 level should send this market looking towards the $1285 level.