Sometimes we celebrate too soon. I could be faulted for that vanity quite soon. But the signs are all there. A recovery to very near the resistance at $940 followed by a $90 drop in a single session can only suggest that (a) there are no fresh buyers out there and (b) some people are actually selling even in the face of continuing troubles in the global financial markets. How else can you explain the gaps!

What happens next will be crucial. If we can stay below $876-877, and start coming down quickly, you can bid adieu to Gold for some time. See this chart. gold-12-oct-08  If I were long, then I will definitely be looking to exit my positions on the next recovery. Thank heavens that I am only long to the extent of my wife’s jewellery!