The price action saw a "bearish engulfing" candlestick formed on the daily chart which portends lower prices and suggests that the rally above 1400 was a false breakout.
We therefore expect lower prices this week, with the possibility of a retest of 1322 as the bears have grasped back control from the bulls.
For the recent gold rally to get back on track, the price needs to quickly get back above the 20 DMA as a minimum and then move beyond the 1422 high from Thursday night.
June is historically a very weak month for gold, with the June to August period often referred to as the "summer doldrums". In the past, the price has tended to drift along at best and sell off steadily all summer at worst.
Equities tumbled on Friday, which should have been bullish for gold - it is worrying that the yellow metal didn't respond more positively to the sell off in stocks. We expect the S&P to test 1600 before continuing its recent strong performance.
The dollar arrested its recent decline at the support area around 83, whilst oil tumbled below $92 a barrel. The action in both of these markets contributed to the sell off in gold.
Today's video for subscribers looks at Friday's action and the "bearish engulfing" candlestick in more detail and our strategy for our current trade.