On Tuesday, September 30, I noted that after gold's decline touched 4110, the key question was whether it could break below the 4110 low. In practice, gold prices repeatedly touched 4110 before halting their drop and rebounding. I said the decline was slowing and a corrective bounce was underway, especially since gold held up relatively well even as the US dollar rose. I stressed that the short-term support band had been raised to the 4120 area, and even to the intraday pullback low of 4138, so chasing shorts was absolutely inadvisable. Instead, one could go long around 4138 for a quick trade, then wait for the rebound to stall before shorting.

On Tuesday morning, I suggested a short-term long at 4128 to gauge the strength of the bounce 鈥?that long was a bet that the 4110 support would hold and stabilize for a rebound. Through Tuesday's daytime session, gold ground slowly higher, and I waited until the evening, when it tested the key 4172 resistance and stalled, before participating on the short side. That zone was the prior breakdown point, the spot to short on its first touch. In late trading, gold fell to a low of 4142 before halting and rebounding, and by this morning it had already broken above the 4172 level. With that level cleared, intraday strategy becomes easier to execute 鈥?going forward, pullbacks are opportunities to go long.

Gold's support on the downside sits around 4138. Last night I emphasized watching for a rebound with 4138 as the defense point, and waiting for a stall around 4172 before shorting. In reality, gold pulled back overnight to 4142, halted, and turned higher. So today, the key focus is the 4138/42 support zone: go long on dips around 4138/42. If the intraday pullback is shallow, consider going long around 4165 with a stop at 4158, targeting 4185 and 4200.

Also, tonight brings the ADP employment data and the PCE price index, so pay attention to the market impact of those releases.