There has been a triangle in place since April and it began to really close up over the past week and it seemed inevitable gold was going to pop out of the triangle pattern soon. The bears were the clear winners in the move as gold dropped a big figure from around 1293 to around 1264.
While there was now specific news that triggered the move, some analysts have blamed this on a sharp drop in China imports of the metal and some on India easing hedging restrictions on imports. There is also significantly reduced risk from the Ukraine situation after the relatively successful conclusion of the presidential elections.
While gold continues to look beaqrish in Asian trade, I am reluctant to sell it at current levels given it is looking a bit oversold right now with the RSI having dropped significantly. As a result I’m more inclinced to sell gold on a recovery to the 1,273 level where it has found support in the past.