Is Gold Price Starting To Fail At Key Support?

New York (Oct 25)  Since reaching $1,308 on Oct. 16, gold has battled hard to hold the support level of $1,280. The last two days, gold has been slightly below that key support but both days it found a reason to rally late and close above.

This morning gold is trading at $1,273, getting ready to test the last real support level of $1,270. A failure there could lead to heavier selling and possibly break the pattern. Since Oct. 16, gold had been making lower highs and lower lows, which does create a cause for concern.

Light volume on this recent weakness is the only hope that this selling pressure is temporary. We are still looking to be buyers, but we are starting to get concerned that there could be a quick dip to the downside. We are still bullish gold, but will not be buyers until this recent pattern reverses. We will observe the market with patience, looking for a reason to buy.

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