Longs are bailing out, especially those who bought Sunday evening up near the highs and some fresh shorts are attempting to chase them further.
The market has encountered some buying in that first zone of support I noted last evening on the charts. Here is an updated version of the same chart showing the buying zone. If the bulls cannot hold it above today's session low, then the path lower is open towards $1330 - $1325. There looks to me to be a bit of support that could show up near $1340 previous to that.
Yesterday the ADX line was flattening out indicating the potential for a halt in the recent uptrend. Today's action has actually turned it down. Bulls are still in control of the market on this shorter term chart unless gold loses $1320. That would put a big question mark into place.
Gold is therefore probing lower now as it seeks to uncover buying lurking beneath the market. The question is whether or not these buyers are willing to let it move lower before stepping in or are eager enough to hold it here and now. I honestly do not know the answer to that and thus have to wait and watch and observe.
Price will have to extend past $1390 now to run out some of the fresh shorts and to attract some more new longs. With the Fed on track for this week, price action could be volatile so hang onto your hat. If events over in the Crimea region flare up, gold will flare higher as well. STay tuned.
