what we very well may see is a big reaction to small news. Or no reaction to big news.
Often we are given all sorts of excuses as to why a big reaction occurs to small news or vice versa.
The truth is, reaction to news is 50 % the news and 50% when the news occurs.
If we are in between channels then there are less long term players and day trader/short term swing traders will play the news and you will see big moves.
But if we are near support and the general sentiment is to bounce up, then the bounce up will happen on the back of any insignificant news.
If the general sentiment is the trend is over and to sell then that will happen regardless of what the news may be.
The funny thing is once we hit this resistance,If there are not enough long term players, and mostly day traders are involved.
then it may happen the the day traders will play the news and effect the chart and break our long term support causing long term investors to escape after years of consistent growth.
We, the day traders need to respect this support line to keep gold on track and consistent. If we break the long term trend, all our trading strategies will need to be changed, and as we change them so do others, so it will be randomness for a while.
If i could buy at that level I would.
Naturally, we will all just run our programs with no regard for the long term trend and then we will complain.
This support will have less reaction as even longer term traders may feel that gold has broke out of a channel at 1900 and now it may break out at the bottom.
Since silver will hit the support line first, we will have an idea of what to expect. As for gold the support is lower then 1550 to 1600 for the time being.