Gold Pushes Through $1,200
After being beaten intosubmission, gold appears to have found a bottom and has pushed through $1,200.The $1,180 bottom was a natural level at which to look for support to hold, andthe rally is not a huge surprise.
Although gold is rallying asexpected, this is not the time to get complacent or overconfident. We think thenear-term lows are in and gold should rally to $1,220-$1,240 levels; however,this could just be a dead-cat bounce in an oversold market.
We wrote last week about the dumbmoney, smart money distribution and the dumb money has added to shortpositions. This action suggests the bottoms are in, but another test of $1,180or even the overnight low of $1,167 could be tested. We are buyers with cautionknowing that there could be a push down before the rally continues.
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