Yesterday gold bounced off its support level; today it bounced off its resistance level, which is the 200 day moving average. As you can clearly see on the chart, that line is holding the market quite firmly for the time being.
Hedge funds are using this level against which to sell rallies while large physical offtake is providing the base of support from $1640 on down.
The market is stuck in a range for the time being with neither the bull nor the bear camp gaining a decided short term advantage for now, although the chart suggests that the bears have the intermediate term advantage.
Unless or until the bulls can take out the 200 day moving average and then get the price back above last week's high, the support level is going to be in danger if physical demand slacks off one iota. Once again it will be up to that side of the gold equation to try to put a firm bottom in this thing especially with speculators in a selling mood.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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