Wednesday gold broke through support and closed underneath the key 1320. The brings the question – Is this the start of a much bigger sell off or a false breakout to the downside? True or False.

There is no way to know at this point, however today will be the key day in helping us decide. At 4:00 AM there is selling pressure taking gold even further away from the 1320 level and is trading at 1312 on moderate volume.

Another close below 1320 would start to cause some concern that this leg of the rally was over. The keys to watch today are 1300 as support, volume and whether there is two-way price action. The biggest concern will be if there are no significant rally attempts. We are still long term bullish, but concerned the next day or two depending on the actual trading action.

Todd Horwitz
Chief Strategist