Gold broke through the key 1554 support level late yesterday and has continued to sell off overnight, hitting a low of 1540. The move down is clearly impulsive, compared to the corrective choppy action of the past month and there appears to be more downside to come, possibly a lot more.
The major support level at 1525 is not far off now and the selling in gold is accelerating as we approach this level. Silver needs watching as it has led gold lower in the past few days and is also homing in on major support around the 26 level.
It looks more and more likely that we are going to have a "washout" plunge, possibly taking out all of the sell stops below 1525 and clearing the decks before finally moving higher in the next rally phase.
The dollar is much higher overnight on the back of the massive Japanese economic stimulus package announced overnight, pressuring gold further, whilst equities continue to climb and oil has also sold off sharply.
Today's video looks at the price action of the last couple of days and our strategy for our next trade.