Gold has sliced through a raft of support levels and fallen decisively out of the uptrend channel that saw the price rise from 1180 to 1434 in two months.
The price has also fallen back below the 50 DMA and 100 DMA and looks certain to retest 1300 and probably drop as far as 1272 as a minimum. A break of 1272 will suggest a retest of 1180.
What is worrying for the bulls is that this decline is happening alongside a very weak dollar and a faltering stock market. The steepness of the decline from 1434 suggests that this may be the start of a new impulse leg lower, with the rise from 1180 to 1434 a completed ABC correction to the dominant downtrend. We will need to see a break below 1272 to confirm this wave count as the most likely scenario.
Today's video looks at the carnage from yesterday in more detail and gives further thoughts on the medium term prospects for gold.