The 1625 level in gold is worth watching for a potential buy set-up. Likewise any type of bottoming formation -- double bottom or H&S bottom -- just above that level needs to be monitored. Gold has seen its share of long capitulation over the last quarter which we see as a healthy occurrence, and likely sets this market up for a move to the top of the recent range at 1800. Several closes on the 4 hour chart below 1625 however, will back us off in favor of a retest of 1620-25.

While I'm no gold bug -- as an investment it has no yield or dividend -- it is however widely accepted as an asset class market and has become a favorite 401K option for even younger workers. Once it does turn higher we can likely count on a regular bid, which makes for an attractive trading vehicle.

Jay Norris is a Market Strategist at www.EosTrade.com

Trading is a risky endeavor and is not suitable for all investors!