Gold tumbles through trendline support
Gold ended the week with a sharp drop through a number of key support levels, breaking trendline support in the process. The wider context of higher lows throughout the past two years means that there is a good chance we will turn higher once again before long.
A break below $1236 would negate this view. Until then, we may see strength come back into play before long. With the 76.4% retracement at $1267, the short-term picture points towards the potential for further downside. However, even if we did see another leg lower in the short term, the sharp nature of this recent decline means there is also a risk of a near-term retracement or period of consolidation. As such, it may make sense to look for longs around $1267, and until then there is a good chance of either a short-term bounce, or simply another move lower.