Gold Technical Analysis October 21, 2011

Gold markets fell on Thursday as traders continue to shed risk. The move sometimes can be a result of falling prices in other markets as traders have to “cover” other positions. The latest action has been bearish, but always seems to pick up late in the session. The $1,600 level is still paramount for the market, and until we can close below there – we cannot sell. The market has fallen, but it has also been “less bad” than many other commodities. To us, this shows us underlying strength in the gold market. We are still willing to buy dips in general, but we also feel that waiting for the $1,600 level to get retested again and holding after a fall would be the safest play to go long.