Gold: A drop below 1270 would trigger a drop towards 1244
After the heavy sell off post-FOMC last week, the precious metal is hovering around the 1280 area. The failure of the gold market to complete a double bottom on the daily chart (starting from mid April) and the formation of a triangle makes the market look vulnerable to downside pressure. Monday’s session ended with the formation of a small hammer on the daily chart. This morning the gold market is in indecisive territory and we expect to see further losses all the way down to 1244. A break below that would open the door to 1230. There are choppy waters ahead so, to get on the short side of the market watch out for rallies to sell in to. As long as we remain below 1350, there is not much reason for the bears to worry.
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