Gold Consolidation Continues
The metals continue toconsolidate, giving more indications that the bottoms could be in. Theconsolidation phase is always the most challenging for traders. It is the timeof most uncertainty. This phase may create false starts and stops because ofthe confusion.
Consolidation is also known asthe birth of markets and all markets go through this phase about 65% of thetime. As we have written the last few days, we would prefer to see gold continue to consolidate.
The longer the consolidationphase lasts, the higher the likelihood the next move will be higher. For monthsgold has been in a downtrend and still has the possibility to go lower;however, the gold sellers appear to be out as gold churns back and forth between$1,190 -$1,220. We look to be buyers at the $1,190 level and look for abreakout to the upside.
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