Monday gold showed a lack of enthusiasm indicating a couple of things. First, that gold is still weak and stuck in the lower end of the range, which we saw when it couldn’t rally when the DOW was down over 500 on Monday. Once again pointing out the fact that gold is not a fear asset but a hard commodity.
Second, that gold continues to linger in the 1280 – 1290 level with a bias to the downside. The range is getting tighter, indicating a much bigger move is coming. Based on the pattern Gold is about mid-range for the last 8 months meaning it can go either way from here.
If you were to set the odds of which way the next move will be, I would say lower until proven otherwise. The trend is down, the pattern is down, and other than some brief bursts to the upside, it looks like the sellers are in total control. Gold looks headed to 1220-1240.