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Looking at Gold's Breakout and Plunge below $1300

Gold had a nice little 1 month rally after June 19th's FOMC Meeting when it rallied from the $1280 range to $1340.  But the breakout above resistance at $1,335 was short lived.  Part in due to the sell signal triggered by a crossover in the moving average convergence divergence (MACD) a couple days ago.

MACD is considered a basic yet dependable indicator that takes into account three exponential moving averages (EMA), the 9, 12, and 26 day averages.  A bearish MACD crossover occurs when the MACD line crosses below the signal line.

Gold has found some support at $1292, it's 50 day moving average.

Fed Chair Janet Yellen told a Senate committee today that there will be a continuation of the current loose monetary policy until October, but beyond that traders think rates will inevitably go up, which means less reason to hold gold (as inflation protection). 

I think we could we hit the June 3rd low of $1240 an ounce level quicker than some think.


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