When the FOMC came out with a 6.5% unemployment target, this put gold on the edge fearing higher rates. This was enough to hold the 2012 double top after consolidating the 1600-1900 parabolic move with lows of 1526.7 and break below 1700 into 2013 to make this a new level of resistance. January this year gold tried to rally only to fail at 1697.8 and break below the year lows of 1626 giving way toward the 2012 low of 1526.7. With the market falling below the 2012 low, this squeezed the 1526.7-1798.1 range, retracing the market near 50% of its 681-1923.7 move. Since hitting 1321.5 gold has reversed back above 1400 and quietly trying to fill back the breakdown. The old lows of 1526.7 as the bottom of the 2012 range will provide a major area of resistance. For the gold bull to take control after this 50% correction, a 7 day hold above 1700 reverses downside momentum and targets all time highs for resumption of the bull trend. Below 1526.7 will continue to give pressure lower as late buyers in gold during the parabolic move of 1600-1900 are caught holding higher prices.
RISK DISCLOSURE: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS IS SUBSTANTIAL AND SUCH INVESTING IS NOT SUITABLE FOR ALL INVESTORS. AN INVESTOR COULD LOSE MORE THAN THE INITIAL INVESTMENT.
