The gold bulls last week were able to defend solid near-term technical support at this month’s low of $643, basis August Comex futures. Now, that chart level becomes even stronger technical support for the bears to overcome. No serious shorter-term or longer-term chart damage has been inflicted upon the precious yellow metal.
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History shows that during big bull moves in most commodities markets, higher volatility on the upside and downside does occur. The higher price volatility does rattle both bulls and bears–and especially those bulls who have jumped on board the long side late in the bull market move. But August gold is in a steep three-week-old downtrend on the daily bar chart.
While bulls have gained confidence that a near-term low is in place, they will need to push and close August futures above solid near-term technical resistance at $681.50 to regain good upside technical momentum to suggest a run back up to the recent highs. And if the bears can muster the strength to push and close August gold back below last week’s low of $643.00 an ounce, then serious near-term chart damage would be inflicted and technical odds would markedly increase that a near-term or even a major market top could be in place.
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