Our belief is that the two-day selloff in gold is the result of a harsh correction compounded by a leaked CME report. Gold is down $170 from Tuesday’s record high of $1912/oz.
We think this may provide another excellent buying opportunity for gold but in order for us to buy here we want to be confident there will be no weekly close below $1728. A close below that level would create a bearish engulfing candle on the weekly chart and point to a fall toward $1500.
We will be ready to add to our gold longs in our retirement account on Friday if it looks like gold will close above $1728. If not, we will be ready to hold on for the ride and buy more when it’s cheaper.