I guess a lot of people wet their pants last night, as gold was down over 4% at some point. The chart incurred technical damage over the short term, and if current support fails to hold, gold could be headed for about $1,440 (or the equivalent of $140 GLD), as we will discuss later on.
When we look at the following charts, we can see that the pattern is still valid so far.
The pattern would become invalid if gold fails to hold above the green support line without reversing soon.
In the nightly report of Tuesday night, I posted the following chart, indicating GLD might drop towards 152-153.
Last night, GLD hit a low of 152.05, and thus hit the target PERFECTLY, as we can see in the chart below.
The RSI is oversold on a daily basis, and volume spiked to panic levels.
Those are facts that should bode well for gold going forward.
If GLD fails to hold above the green support line, we can expect a drop towards $140.
When we look at the Bullish % index for mining stocks, we can see that it reached an extremely low level again at 13.79.
This should also bode well for both gold and gold stocks. However, the HUI might still retest the pink support/breakout line over the next couple of days…
However, if we would get a remake of 2008, even those indicators can’t stop prices from falling, so be cautious!