As I had stated yesterday in my weekly analysis of Gold I was expecting this pair to fall below 1340 towards 1335 due to the significant resistance it was at. We have now seen a push downwards towards the strong support zone between 1330 & 1335 that I have marked on the daily. I personally will be taking longs at 1332, with stops below last weeks low at 1327.5 and take profits just underneath last weeks high at 1362. If last weeks low is taken out we will see further push to the downside breaking our last reference daily low at 1324 and this will no longer be a retracement but rather a medium term downtrend for the metal. I do not expect last weeks low to be broken as the weakness in the dollar is signifying that this is just a simple retracement for the yellow metal and upside continuation is probable. Risk to reward on this trade is outstanding as it is greater than 1:6. Overall I do expect Gold to break the highs of 1365 and push past multi-year highs of 1400 during the month of February.
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Please cancel any gold buy orders, momentum is carrying the metal downwards rather swiftly and price action has turned bearish. I will be looking for opportunities to go short upon a break of last weeks low. For now I am back to neutral.