Gold came into this session with a breakout setup-an inside day, and the narrowest range of the previous 4 sessions. The strength in the US Dollar and the belief that the TARP plan was the fundamental impetus for today’s break. Technically, $869 was the key support level for December futures.
Looking forward, $858.60 is Fib support, with second support at the late August high of $849.70. A break under there could lead to a selloff to next Fib support of $835.90, and the 40 day MA at 833.90. The Dollar Index is trading at its September high; that may serve as a short term cue for today’s direction, as will the course of the financial markets.
