Gold Bugs have been Sprayed
And they don’t seem to realize that Merkle had the spray can. The gradual selloff in gold over the past two trading days will turn into a rout when they realize that the last part of their funny money dream, a Fed QE3 is not in the cards. So this week’s Fed meeting should show more stability thinking and gold should come under extreme pressure after the meeting. In my opinion gold’s major support at 1266 an ounce will be tested before the end of the year. You might want to look over our comments of December 8th again.
As to stocks, on the S&P 500 the big resistance area around the 200 day average at 1265 looms large. To me a few solid closes above 1275 would be needed to get me enthused. In the meantime the 1220 area is basic support and 1170 solid support.