The weight of Gold's weakness should be apparent to anyone pondering the chart below, since even a novice can see how relentlessly gravity has been tugging on the metal's price. But what are we 'experts' supposed to think? From a Hidden Pivot perspective, one more sharp tug could damage bullion's prospects for at least the next few weeks. Specifically, if the June contract were to slip beneath the labeled 860.00 low without an intervening rally from here of at least two days' duration, it would create a bearish impulse leg of daily-chart degree. That implies that any bounce that follows the support's breach would likely be doomed (unless it were sufficiently powerful to push above the peaks made in mid-April and late March at, respectively, 956.20 and 960.30). More likely is that the decline would continue to at least 830.70, a Hidden Pivot support, or to 793.90 if any lower. At the latter price, Gold would have corrected about 24 percent from its mid-March highs. Although that would be pretty nasty for anyone planning to ride out the storm, in the bigger scheme of things it would amount to no more than a routine correction within a long-term bull market. Technical analysis aside, we see no reason to think the correction will be much worse than that. Anyone who would assert otherwise must explain why he thinks the dollar is about to embark on a prolonged rally, for nothing less than that is implied by a prediction that gold prices are headed significantly lower. We've heard a few arguments in favor of the dollar, but none that is even remotely convincing. Granted, the dollar is oversold, and 'everyone' has been betting against it. But it is in the nature of bear markets to generate extremely oversold readings for longer than most
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