On October 13, gold opened higher yesterday and reached 4,217 before hitting resistance, then slid steadily lower. The price still failed to break through or hold above the 4,230 high, and with the U.S. dollar also staying strong throughout, gold's decline under pressure came as expected. Still, the drop was relatively large: after falling below 4,168, the metal extended losses to 4,154, where it stabilized and finished in a choppy range.
In today's early session, gold briefly dipped below yesterday's low of 4,154, retreating to a low of 4,150 before stabilizing and rebounding. With the dollar pulling back from highs, gold seized the opportunity to bounce and is now near 4,180. For today, watch the 4,150 level as support and the 4,217 high as overhead resistance. My personal view is that the market will remain range-bound: after a pullback, look for opportunities to keep betting on upside room, while if gains fail to break 4,217, watch the strength of any pullback. There is no need to agonize over direction or over the possibility of a big rally or a big selloff.
Today's view: go long on gold on a pullback toward the 4,155 area, with a stop at 4,145 and a target above 4,180; participate on the short side on a rebound near the 4,200 area, with a target of 30 to 40 dollars.
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