Ultimately, this is a market that still remains very range-bound but erratic, which is a horrible way to trade this time a year.
Gold markets gapped lower to kick off the Wednesday session, and then sliced through a ton of support. However, by the end of the day we completely turned around in what looks very much to me like a very thin market that is looking to wreck accounts. The fact that we have been all over the place tells me just how uncertain the markets are going to be, and trying to jump in and take advantage of any type of motion is going to be very dangerous, but you need to be very stringent on your position size more than anything else. As you saw during the day on Wednesday, you can get sudden and erratic moves, only to see the whole thing turn around in your face.
Don't let fear prevent profits!
The $1800 level seems to be a bit of a magnet for gold markets, but we have been all over the place the last couple of days and I do not think you can trust much. On Tuesday, I thought for sure we were breaking out and we were going to finally slice above the $1820 level. However, in a span of about 15 minutes, gold markets lost something like $35. This shows just how little follow-through there is for the buyers, but you could for the most part say the same thing about Wednesday and the sellers.
The US dollar will have its influence as well, but at this point in time most traders are worried about closing out their books for the year. In other words, people are just going to be trying to figure out how to flatten their books between now and the end of the year so that they can start out fresh next year. The beginning of the year is typically one traders start to put risk back on, especially after the first jobs number in January. Ultimately, this is a market that still remains very range-bound but erratic, which is a horrible way to trade this time a year. Quite frankly, the only people are trying to trade right now are gamblers and degenerates that will more than likely do a lot of damage to their account before realizing any strong gains. This is the reason why most professional traders do not trade this time of year.