December gold continues to be one of the most volatile futures markets to trade right now. The only thing that is holding gold up here is the technical price level which all gold traders are watching not being taken out. This level happens to come in at 1850 and is quite important in the grand scheme of things. If this level gets taken out the most likely immediate direction of gold is lower and with no support coming in until all the way down at 1800 even. I think that what is likely to happen here is gold will not have the strength to take out the recent high of 1980 without a stimulus bill, or something along the sort that is a “big headline” type of event. Want to know something “spooky,” check out the biggest gold ETF having its biggest liquidation since March 20th yesterday selling off 503,000 oz of physical gold. The way to play gold right now is to the short side, with buy stops sitting above the recent high of 1966. If a trader is wanting to be long gold they need to be willing to give up the gains between current levels and the recent high. I think being long from this level is unlikely to avoid a washout selloff that appears more and more likely as bearish sentiment creeps in once again. Gold is currently up at 1890 and the volume is extremely light. This could be a draw for bulls but beware that no trading volume means no confidence. If a trader wishes to be long I would suggest using a defined risk call spread rather than outright long futures.