$1,204 Is Gold's New Critical Level

Gold is not done bottoming yet, says veteran trader.
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Gold now needs to sustain the $1,204 an ounce level before positive momentum could be maintained, Bill Baruch, president of Blue Line Futures, told Kitco News.

"$1,204 now comes back in and aligns with the trend lines from the lows, and we're testing it here today as the dollar against the emerging markets has increased a lot," said Baruch.

He added that gold has been losing its status as a safe haven currency to the dollar.

Baruch noted that the gold market is still in bottoming process, and investors could expect to see lows of $1,180 an ounce before a rebound occurs.

"A move down there, if it had to happen, if it held, that would be a good thing," Baruch said.

On base metals, Baruch said that there is "tremendous headwinds" facing copper.

"With these emerging markets currencies taking tremendous hits, there's fear there that growth is going to slow in South America, there's growth that's going to slow whether it's Italy, or Turkey, or with international trade. It's all dragging copper lower," he said.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.