Gold Preps for Next Move

Gold has a decision to make.  On the shorter term charts, the drop in the yellow metal that took place last Friday and yesterday ran into some bullish divergence right at support.  Bullish divergence inside a bearish trend usually means a continuation of the bearish trend (divergence is just a pause, not a trend shift).  But the divergence occurred on the short-term charts, and the longer the channel trading runs, the more likely it is to wipe out the effect of the divergence.  Gold has some decisions to make.  A break above $1,235 (resistance points set by the bounces over the last couple days, don’t hold much strength) or below $1,200 (firm resistance level set back in May, and likely a number of pending trades have accumulated here and are sitting at this level, much stronger support).  Will be a fun week.

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