Gold Softens with a Round of Profit Taking

This morning gold is trading under moderate pressure, currently down approximately six dollars at $1338.50. Today's report is an early edition in which we will focus completely on our strategy for our current to trade. We will look at two distinctly different models. The first model makes the assumption that recent downside pressure could be the beginning of a small correction. With that in mind we will use Fibonacci retracement from the entirety of this last rally to determine a logical point that the market could correct to.

The second model assumes that prices will remain strong and gold will close above $1351. This model looks for a continuation of the current rally without any type of major correction taking gold prices to $1381.

Although we do not know which of these two scenarios will unfold, it seems more likely at this point that traders will witness a shallow correction before returning into rally mode.

Wishing you as always, good trading,