Gold backs off from chart resistance

The region near $1434 - $1440 is proving to be a bridge too far for the gold bulls for the time being. You can see that this level held the market in check twice previously, once in late May and again in early June.

Bulls ran it up into this resistance zone this week but thus far have been met by solid selling. As stated in yesterday's comments, the market is overbought and is thus susceptible to a bout of profit taking.

There is psychological support first at $1400, then at $1380 and much better chart support down near $1355.

Markets which are reacting to news events can be very treacherous often making wild swings in price so traders be careful. Do not get too aggressive in here unless you have very deep pockets and are not overly leveraged. Better to make a smaller sum of money on a winning trade,  or lose a smaller sum of money on a trade gone bad, then to bet the farm and end up being a tenant worker!

There is a time to be brave and a time to be cautious.