The Gold markets drifted a bit lower during the trading session on Monday, looking at the $1228 level for support. There is plenty of resistance around the $1225 level that has recently been broken, so it should now, at least in theory, offer a bit of support. However, if we break down below that level we could continue to go much lower. At this point, even if we rally from here, I suspect that there is a lot of supply near the $1240 level, so I think it will be difficult to break above that. We have been in a downtrend, and it’s likely that we could continue to see that as the overall attitude.
Above there, I think that the $1250 level is even more resistance, and I think that if we were to go looking towards that level, you can probably count on a lot of selling pressure. Longer-term, I do think that investors are looking to pick up gold at these low levels, but that’s probably best to be thought of in physical terms, as the leverage could be very dangerous to hang onto. Shorter-term traders are looking for reasons to sell, but as I stated previously, the area just below could offer a bit of a bounce, giving us an opportunity to sell at higher levels if you are patient enough.