Gold Bugs get Swatted:

Gold continues to trade like a currency: After Gold reached a low of 1626 Friday morning, a small tick up in unemployment to 7.8% allowed investors to step back in on the buy side. The chart shows a bounce off a down-trend line . However, after reaching a high of 1663 during last night's session, some of this momentum has died out and the market is trading nearly $10 lower. This will be a light news day ahead of US earnings that kick off tomorrow. There will be a supportive area at 1641/39 and a close below there will be discouraging to the momentum from Friday but a close below 1639 support will be very negative. 1661 is a retracement level and will be resistance; a close above here will help continue the momentum. Only a close back above the 200 day moving average, 1667-70 will be bullish and help this market attract more buying. Bottom line the Gold market is trading like a currency. Stronger dollar equals lower commodities prices across the board including Gold .The tight range may provide an opportunity to play the Breakout , If want to play the long side consider an Gold Future option play, Take the Feb13 Gold 1670 calls . Whatever you pay for the option is your total risk in this case roughly $900. That gives you 21 days of long exposure. On the flip side if your bearish consider the FEB13 Gold 1630 puts $1300 risk. I thinks it a pretty good bet that the market doesn't stay between 1670/30 for long. Good luck and Good trading Resistance - 1661*, 1667-70***, 1681*, 1688*** Support - 1652-55**, 1645, 1633***1593,1530