Gold - Short on H&S around $1235-$1240

Gold has been forming a head & shoulders pattern since the beginning of the year that peaked at resistance of a longer term descending channel. If we see a bounce down from the head and shoulders resistance somewhere between $1235 and $1240, that will make a good case to go short. If you're aggressive, you can short the bounce off resistance, and the more conservative trader could short upon completion of the pattern around $1200. In that case, expect a move down to at least $1125 at December support levels, but possibly further to the bottom of the channel.