Gold challenged resistance levels around $940 but failed to hold early gains and gave way to selling pressure as the US dollar index strengthened during the session.The failure to hold any gains today sets up another challenge of the week’s low, as a drop to $915 seems likely. Look for the US dollar to challenge overhead resistance at 81.50 to close the week strong. Tomorrow could bring about position squaring that could push markets past recent trading ranges.
Traders that want to be simply long of gold futures ought to wait for some short of washout low in the low $900 range as proof that buyers are stepping back into the market. If predictions about gold being priced at $1,500 or higher turn out to be true, then allowing the market to prove its strength is a wise decision.Take one’s cue from the US dollar and trade inversely to the direction it breaks out of its current consolidation pattern.
There are a lot of smart people who are bullish of gold, yet there are also bears. Some top-notch experts see inflation and some more fearful of deflation.One need not place an emotional stake into the market, such that the market needs to ‘validate’ your opinion. The ‘right’ position is the one that goes with the trend, whether it is up, down, or sideways. Right now, the market is tracking the US dollar with much interest and that is where cues should be taken from.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak,contact me attom@altavest.com. Visit www.altavest.com to request a FreeTrading Kit. Keep in mind that there is risk of loss in all trading.
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