At the moment gold is at a critical crossroads. If it can move above $1375 it will confirm that an intermediate degree bottom occurred last month at $1251, and start a pattern of higher highs. If however gold continues lower and breaks below that $1251 level it will confirm that an intermediate degree decline is still in progress and the recent bounce was nothing more than another bull trap to work off the short-term oversold levels.
Actually based on my cycles analysis I think we can even narrow the band a little tighter. If gold can move above the October 28 high at $1361 over the next several days it would confirm that this daily cycle has become right translated and complete a new pattern of higher highs and higher lows.
If however gold moves below Friday's half cycle low of $1305 it would confirm that the daily cycle has topped in a left translated manner and the odds would then be very high that the October low at $1251 is going to be broken over the next 2-3 weeks.
Until one of these lines in the sand get broken, there is just no compelling reason to place a directional trade in the precious metals market.
More in last night's report.