Gold Chart plus Comments

I am pressed for time right now but wanted to get some charting out there for the readers. I apologize for the lack of "stuff" this week but a trader's life can be busy at times.
As those who have been regular readers of this site know quite well by now, I have been very cautious in regards to gold for some time now. When a market continues to violate one chart support level after another, it is never a bullish sign, no matter what all the self-proclaimed experts are pontificating whether it be some backwardation nonsense chatter or "bullish COT" reports.
I have said it before and will say it again, speculators, particularly the large ones, aka, hedge funds, are what drive markets nowadays. When they are selling, it is never bullish. The only time it is bullish is when they are loading up on the short side and a market is not breaking down through support levels.
We might have just reached that point. I want to emphasize, "might" because I need some further confirmation from the price action. What I am seeing however is a market that keeps entering a zone that I have marked, "STRONG BUYING ZONE" and every time that it does, it does not stay in that zone for more than three hours time.
Note the following 60 minute chart and you can see that the moves lower into this zone generate high volume buying in which price tends to spike off of the worst levels rather than closing each bar down on the lows. That is an indication of heavy buying by some very strong hands.
We have had three occasions now since the first of this month that this level has held rock solid. it is evident that the bears have been unable thus far to break the price down through the bottom of this zone.
What I want to see to feel more confident is an upside breach of the top of this trading range that REMAINS ABOVE this level for at least 4-6 hours, preferably a day. I believe that if this occurs, we will begin to see some of these hedge funds start to cover.
If gold can get back above $1600, it will suggest that a bottom is in. The flip side is of course if this support level gives way. Let's hope it does not.

traderdannorcini