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CT PPI Will Rule Trade

When you look at gold, you've had a correction and you're down into the zone of the 18-day average of closes. I hadn't done that since October and you've come back, you're down for the week by 1%, you're under that number by $16. I don't know if the PPI can lift it back up or not from that. Or if it's going to continue on its decline. What I can tell you in looking at the chart, it's a bear slope in the market. I can also tell you you've got a pattern that's very clear of lower highs and lower lows – that is bearish.

The market is underneath the gray line, which is the 200-day moving average. The green is the 100-day average, you see that?...and the 18-day average is trying to get down to them. Rallies should be contained as the market starts centering resistance, but even can do that into the $2024-2025 area, the 100 and the 200-day averages all the way up to $2039; you'd have to get over this number here and I think that's around the $2047 area to say, 'Okay, this is over on the downside, we'll negate that by getting over it.' I think you're going to find willing and willing sellers on the rally.

I don't know what they'll do in front of the PPI, but I do think that, when you get up there, that's what could happen. The markets had gotten its bounce off, the lower Bollinger Band, but it didn't find any support. The reality is, at these key averages with it, you're getting a bounce from there, but that's now the resistance area and you are oversold.

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