We have a large SLIP ZONE overhead now in the gold contract...
We could see a 30-40 point move to the upside any time now as long as this 1275 area holds...
Conversely now, if this is rejected... Gold can fall right back to 1252 area.
I don't expect sideways from here.
Yesterday's shake out in the miners and the contract is setting up a MAJOR MOVE.
Here is my take on gold going into Wednesday:
GOLD PUSHES MUCH HIGHER - CHALLENGES 1275 RESISTANCE - As we mentioned yesterday, we did see a modest reversal on stronger volume on Monday and that it turns out was a shakeout, so Tuesday we saw a solid advance, back to that 1275 resistance level and after the COMEX close earlier in the day there was one attempt to push it higher that was rejected at 1277 and then we saw a pullback to 1274. Now we already expressed to you that we did expect STRONG RESISTANCE now at 1275, and so far that's what we have. Nevertheless, the price is holding in here just under resistance and as long as we hold around here we can expect another attempt. We also stressed that we have a "slip zone" of unstable prices over head to 1310, so we don't expect stability here, hence no surprise to us the 1277 did not hold. So we'll see, but we want everyone to be alert for a "shock" in the markets that would cause gold to EXPLODE 30-40 points higher to that 1310 level. We could see a corresponding broader stock market under a lot of stress behind such a move. We'll see if it develops this time or not.
Attempt #2 is underway tonight.