While many wish and predict thatgold has hit bottom, the charts tell a different story. The $1,240 area is nowa major resistance level, and gold is more likely to break to the downside,probably below $1,200. Our next target and support level is $1,180, although abounce from $1,200 would be no surprise.
On Thursday, gold printed newyearly lows and bounced, looking like it had made a new bottom. However, therally looks more like a dead-cat bounce and any rally to $1,240 should be sold.There is no reason to believe the bottoms are in and more selling is near.
Gold investors should not panicor sell if the investment is with money they won't need tomorrow. Tradersshould look to be more active, looking for resistance levels to sell. The nextlevel that we will sell as traders is $1,240, but as investors we will hold ourposition and not try to time the market.
By Todd 'Bubba' HorwitzContributing tokitco.com
Follow @Bubba_Trading