From the Desk of Ian Culley @IanCulley

Gold is hanging on for dear life.

Rising interest rates and a strengthening dollar create formidable headwinds for the shiny yellow rock.

I remain optimistic for the entire precious metals space, but hope is not a viable trading strategy – especially if gold undercuts its 2011 highs.

Some gold bugs may find it difficult to accept, but gold’s a short if and when it decisively closes below its prior commodity supercycle peak.

And it’s trading back at those former highs today…

Let’s review the levels.

Check out the monthly candlestick chart of gold futures:

I understand the August candle is incomplete. It doesn’t bother me. 

I’m not analyzing the current month’s candlestick. Instead, the prior-cycle peak from 2011 holds my focus. 

The monthly chart simply provides the most precise depiction of that crucial level.

Notice gold has managed to hang tough – five months and counting –  since it reclaimed those critical former highs last March.

It retested those highs in May, June, and August, three of the last four months.

Bullish bias aside...