Gold Hits Stop Sign At $1,240

Tuesday saw gold make an attemptto break out above our resistance level of $1,240, trading as high as $1,243before failing and closing below. As we wrote on Tuesday, we expected the firstrun at $1,240 to fail, and it did.

The good news -- gold continuesto make higher lows. The next test of $1,240 should create a breakout to theupside, taking us to our next target of $1,275. At the same time, silver ismaking another attempt at breaking out to the upside.

As long as these support levelscontinue to hold, all signs point to a big rally. Traders should be moving uptheir exit levels in case of failure, but the pattern looks great and shouldcontinue to knock out resistance levels on their way higher.

By Todd 'Bubba' Horwitz

Contributing tokitco.com

Follow @Bubba_TradingBubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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