From a coolly technical perspective, the daily chart looks no worse than 1497.40 from here — just $67 beneath yesterday’s low. That is probably the best-case scenario at the moment, but whether things go literally downhill thereafter will depend on the ability of 1497.40 to turn back the stampede. For if it does not, it is but a mere $5.90 to the watershed low at 1491.60 recorded almost exactly a year ago, on July 1. That low may look like a will-o’-the-wisp, but because it was the last stick-down bar before Gold embarked on a historical bull leg, it counts for more than might appear. We’ll deal with the precise implications if 1491.60 s breached if and when it happens, but suffice it to say, the creation of the first bearish impulse leg of monthly degree since October of 2008 would not be a welcome sign.
There are nevertheless some things to watch for if you’ve got your fingers crossed: 1) a bounce from either of two Hidden Pivot supports at, respectively, 1429.60 and 1392.40; (Please note, however, that both of these numbers are not to be relied on, since the impulse legs associated with each are not true impulse legs for reasons of having failed to surpass the requisite pair of prior lows; and 2) a humongous rally following the running of stops on a breach of 1491.60. This last signpost cuts both ways, however, since a relatively feeble rally following a breach of 1491.60 would be telling us to “Look out below!!”