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Is Gold Taking A Breather Or Has It Met Critical Resistance?

|Includes:SPDR Gold Trust ETF (GLD)

A lot has been written lately about gold as it pushes off once more from the support of the 1200s. The momentum has been solid, raising the price to 1344 however there are signals that this momentum has run out of puff. To confirm this, we should be closely watching the gold chart over the next few hours and we would be looking for closing candlestick below the support line. Once it is apparent that there is a turnaround, a short position may be in order. The stop loss would be set around the resistance line in red. Whether this new direction is the real deal remains to be seen and we would have to factor in the fundamental analysis. Most analysts are saying gold is extremely oversold but if the fed continues to trim bond purchases, it will fail to extend its gains. It may be that gold will rise over 2014 but it won't be a smooth ride.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: GLD