February 28th was the last time I wrote about gold, at least on the public site.
The market was in the process of breaking rising wedge support at 1318.
The breakdown that followed set us up with a target of 1280.
Here’s what I wrote on the 28th of February:
If sellers manage a daily close (New York 5 pm EST) below 1318, we could see gold slide lower toward the 1300 support region.
In fact, if 1318 gives out this week, I would suspect we will see gold move lower toward the wedge inception point at 1280.
Gold hit our 1280 target in record time.
Sellers carved a low of 1281.17 on March 5th and 1280.86 on the 7th.
As you can see, shorts had plenty of time to book profits.
Looking back, taking profit in the 1280 support area was an excellent decision considering the bounce that has occurred over the last few weeks.
But we may have another short opportunity on our hands.
This latest bounce from 1280 support has carved what appears to be a rising wedge pattern.
Gold bulls also retested the 1322 resistance area during Monday’s session.
As you can see from the 4-hour chart below, that gives us a confluence of resistance between 1322 and 1325.
The area will likely continue to attract sellers this week.
However, keep in mind that this relief rally is intact while the market is above the wedge support below.
That means we could see additional bouts of strength above 1312.
But if sellers do manage a 4-hour close below wedge support over the coming sessions, we could see gold trend lower toward 1280 once more.
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