Gold Remains Range-Bound
The search for directioncontinues in gold as the metal stays in a range between $1,305 and $1,328. Theprecious metal is still preparing to make a big move, and the inability tobreak out over $1,330 on a weekly chart suggests that prices will be headedlower before they go higher.
This consolidation patterncan last for an extended period of time and although a big move is coming, it'snot imminent. Consolidation is the period that markets spend about 65% of thetime in and are the time of most uncertainty. The consolidation period consistsof the weak hands and strong hands continually changing places, which keepsthat market in a trading range.
In the case of gold, thelonger the consolidation lasts, the bigger the next move will be. We believethe next move is lower and gold should test the recent lows. Since marketsdon't announce themselves, the best way to trade this pattern is to sell at thetop end of the range and be prepared to cover at the bottom of the range.
By Todd 'Bubba' HorwitzContributing tokitco.com
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Bubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.