Gold goes up, gold goes down as it continues to test support and resistance. The pattern and footprint are clear, it appears that gold is consolidating between 1280 – 1290. Eventually it will break out of this range, but which way is still the question.
The current trend in gold is lower, which means the probabilities suggest there is more room on the downside. As we know, markets don’t announce themselves and we can only base our assumption on price action. The current price action is confused, which is why we continue to see rallies fail and sell offs bounce.
We remain long term bullish, which is an easy call based on history, but in the short term anything goes and if gold can’t hold 1280 there is a lot of room to the downside. With the FED report on Wednesday, that could be the catalyst to push gold up and start the next uptrend or break it down continuing the current downtrend. This action suggests being neutral and waiting for the footprint to guide us. The lean has to still be bearish until gold can close above 1290.