(Kitco News) September 29 —Markets don’t go straight up or down, they need to pause, correct and take a break. The recent technical trend in the gold market has been bearish;prices have been trending lower off the July price high in an orderly manner. This heightened volatility has emerged just ahead ofa test of major support at the December 31, 2013 low at $1,185—a key objective for the bears.
There is an old market adage that heightened volatility is seen as a market builds tops and bottoms. It makes sense really, the stakes are high and both the bulls and bears are testing their positions to see who has the controlling power.
Bottom line? The trend is still bearish. But, the market has approached a major long-term technical chart support zone from the December low. The gold market is oversold, and a bullish momentum divergence is developing.
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Chart courtesy of kitco.com