“Because gold went back above $1,440 recently and did not hold you have professionals booking gains. If gold would have held above $1,440 you would not have seen the extent of the profit-taking that we have seen in the last couple of trading sessions.

You have to remember that hedge funds had tremendous paper gains in gold and silver and it is natural for them to want to realize those gains, especially since we did not hold the breakout in gold. Silver had trouble extending gains above $38, so we have seen profit-taking there as well.

Hedge funds do not get paid to sit on client money indefinitely; they get paid to put it to work. So these same hedge funds who booked profits will be looking to reestablish positions in both the gold and silver markets. They will be looking for a technical trigger after the first of the month to get back on the long side.

As long as gold holds above the $1,400 to $1,410 area for the next few trading sessions it will be able to avoid any short-term technical damage on the charts. That would allow the market to consolidate above the support level and quite frankly the longer gold can consolidate above that support level the more likely we will see a fresh buy signal for the longs who are on the sideline.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/28_Dan_Norcini_-_Healthy_Consolidation_in_Gold_After_Profit-taking.html