For the past few days gold has tried to rally, tried to break and is still sitting between 1280 and 1290. In other words, gold has gone nowhere but has gotten there in a hurry. The pattern has tightened, which tells us that a much bigger move is coming which is now more likely to the downside.

Obviously, there is no guaranty which way this market will breakout but with resistance remaining at 1290 and a new support level at 1270 the pattern certainly suggests there is an easier path lower.

With the equity markets under pressure there still appears to be no real bud for Gold which many would consider an issue. If you believe gold is a safety play, why isn’t it rallying here? This brings us back to the simple fact that the sellers are still in control of the gold market and until that changes we will remain negative looking for 1220 -1240.

Todd Horwitz
Chief Strategist