Gold Goes Below $800
The February Comex Gold contract (GCG8) took a turn to the down side today with a 2% drop. The low of the day was at 797, but Gold had fought back to 802 by the time of this writing. Elsewhere, the Dollar Index gained some ground against the world's currencies, with a high of 76.75 and a close around 76.56.
On the Gold chart, we see short-term highs becoming lower and lower during the last three periods. This has been the case since the beginning of November. There seems to be a bit of consolidation going on, with the lows getting higher as well. In the short term, trade is becoming more and more range-bound, which may be a sign of a breakout to either side with traders getting ready to ride the momentum either way. If it is to the upside, the highest level of resistance is around the 850 level while the downside shows a lot more room before support. If this is a top, it could be a long way down.
Tomorrow, we look forward to CPI data.
Mike Tosaw, Director of Education
