GOLD Weekly Chart Descending Triangle Gold Drops Into Bear Market

Gold, silver, platinum, all PM's, as well as oil, commodities, copper, are getting slammed this morning. China's GDP numbers are weaker than expected verifying a slowdown so copper and commodities are beaten, however, the PM's are being dragged down as well. Gold was hit with a double whammy last week; first, the news that Cyprus would sell some of its gold holdings to cover debt (more supply on market takes price lower) and second, the GS downgrade. Lots of investment houses follow what GS says so the double whammy initiated the slide. Further, there is now concern that other nations may sell some of their gold reserves to cover debt as well. This thinking is likely exacerbating the slide in PM's today.

Gold plummets this morning printing 1392 as this is typed. On Friday, gold dropped into a bear market (-20%), from the 1900 top now under 1500, as shown by the short neon blue bars. Note the strong support at 1320-1420 representing the congestion zone from late 2010, early 2011. The indicators are positively diverged (green lines) with the red lines wanting to see another low in price after a bounce occurs. Gold should line out sideways from here at 1320-1420 and recover. Remember the COT chart a few days back, and the current one, is set up for a recovery in gold. Gold will likely move sideways for the coming weeks, months, maybe a year or two. This 1320-1420 range is likely a buying opportunity but with such momo downside today, there is no rush. A few days are going to be needed to wash out all the negativity but price should base and recover, and should hold 1320.

The 1550-ish support failure was a key, almost two year respected level, thus, price will need to come back up to back test as the weeks play out. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.