Gold gained $17 to $1208 on Tuesday. That sounds impressive but it’s not much in comparison to the declines over the past two months. It doesn’t even recover the $23 decline on Friday.
To me, that’s a bearish signal. In the shorter-term, so long as gold doesn’t form an engulfing candle, I fully expect a selloff.
I think gold shorts can scale in this week and then keep an eye on the longer term levels.
Gold weekly chart
The first area of strong selling interest on my radar is just below $1250. That’s followed by the 21-week moving average and the trendline from the June high.
