Gold fell back to 1191 and then has rallied back to 1216 area. Gold appears to be setting up to extend the counter-trend reaction into the first week of March. With back-to-back Directional Changes for the weeks of 02/08 and 02/15, the typical outcome is one of choppy-trend. Last week we get the high, and this week may produce the reaction low. This this proves to be the case, then we should extend the rally into the week of the 29th. Overall volatility should begin to rise over the next three weeks. So stay nimble and objective. If we rally into the end of the month, then we can still see a test of the 1309 area.

Using our WHAT-IF Models, we suspect that a new high during the week of 02/29 should bring in a Weekly Bearish up to the 1170 area. If that is elected, then gold has most likely prolonged the agony and we will then still look to the next Benchmark. None of the price action so far have negated the potential to penetrate the $1,000 level for a final low.