Gold price levels to watch (ZT)

If you trade gold futures, here are some price levels to watch for:

$660: A bounce at current levels could send gold prices back to $680, with a brief resistance at $670. No bounce could mean gold may drop down to between $640 and $650. (Editor’s Sentiment: I think a bounce here is likely.)

$680: A push past $680 offers a clear road to $700, where gold futures have twice met with strong resistance. Resistance at $680 forces gold back to $660 with slight support at $670. (Editor’s Sentiment: Resistance is likely if the move up to $680 happens quickly -- within the next month.)

$640: Failure to find support at the $640 level spells a drop to $620, and then possibly as low as $580. Support at $640 could buoy prices back up to $660, though gold will likely find strong resistance back at that level. (Editor’s Sentiment: If gold drops to $640, it is highly likely that prices will find support at that level.)

Conversely, the dollar is getting a slight reprieve. How long this “breather” lasts remains to be seen. The market sell-off last week certainly didn’t help spirits. However, when the euro retraces, it takes its time.

The 1.8% drop since July 24 may only be half over. The previous drop in the euro clocked in at 3.2% over the course of a month and a half.

Translation for the near term? Over the next month or two, gold prices may trade rangebound, meaning a bounce at $660 takes gold to $680, while resistance at $680 pushes gold back to $660, and so on.

Traders, look for a change in these dynamics if gold breaks either support at the $660 level or resistance at the $680 level.