As we wrote on Friday, gold hadat least another $20 to rally before it would find resistance. Gold is now up$15 from Friday's low and should start to run into some resistance. The $1,275level should act as the first stopping point for this current rally.
The rally -- whether it's real orjust a dead-cat bounce from oversold conditions --should see some sellers comein between $1,275 and $1,280. That would be healthy for the market and thepattern.
The key to the next move in goldis how the market reacts at the next resistance level and how it reacts to thedip after resistance. We are still cautiously bullish with an exit below$1,240, but the next couple of days should tell the story as to where gold goesnext
By Todd 'Bubba' HorwitzContributing tokitco.com
Follow @Bubba_Trading