Gold markets initially tried to rally during the trading session on Tuesday, but gave bank gain to show signs of weakness yet again. In fact, we ended up dipping below the $1725 level, but have also found buyers in that area to support the market. This is a market that has sold off quite drastically, so therefore a little bit of sideways action could make quite a bit of sense.
Now you have asked the question as to whether or not the market is going to go sideways and kill some time, or if it is going to go much lower. The $1700 level would be the target on a breakdown, which is a large, round, psychologically significant figure, and an area where we have seen support previously. At this point, the market is very likely to pay close attention, and therefore it’s possible that we could see a bit of a bounce. However, if we were to break down below that level, then it’s likely that the market simply falls apart.