If the commercial shorts are in complete control then why can't they just take the price down much lower? I mean what is stopping them and why wait? The answer is that it depends on where the huge buy orders are. For example foreign central banks, the Chinese sovereign wealth fund and others will come in and take physical delivery of massive orders. So if you want to play it safe watch what they are doing and buy at that support level where the price will snap back due to overwhelming physical demand. At lower prices these massive buy orders in London become bigger and bigger and the trend reversal to the upside will be that much more violent.
Last year I waited for the Myer Christmas sale to purchase something I'd had my eye on for a long time. By the time I got there the item was no longer available as I wasn't one of the lucky few that were first through the doors.
Good luck if you're trying to trade gold, you'll probably get burnt. Just accumulate on the take downs. Recently instead of going all in on the dips I've started to buy 50% bullion and 50% $US. That way you're fully hedged for any further downside (assuming the dollar experiences short term strength) since gold is essentially the inverse of the dollar but at the same time, and importantly, you're still accumulating metal. When QE3 or whatever is announced, I will immediately convert those dollars to physical.
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