Gold took a brutal pummeling on Monday — catalyzed by an unusually large sale in Asia, if reports were to be believed. The liquidation spiked the futures down to 1080.00, well in excess of the 1125.00 support where I’d said real trouble would begin. That is where a crucial midpoint pivot comes in on the monthly chart, and its decisive breach yesterday makes it far more likely that the August contract will now head down to at least 971.30, or even 817.50. More immediately, there will be a potentially tradable test of support at p=1090.90, a red line on the chart where night owls should consider bottom-fishing. The same goes for two other pivots shown, respectively, at 1077.40 and 1064.00, my worst case for the near term. There are a couple of remaining spots where you could look for a bounce: 1084.50 and 1067.80. If the first works precisely it would imply that 1067.80, rather than 1064.00, is where bulls will regain control, at least temporarily. ________ UPDATE (July 22, 11:31 a.m.): The 1090.90 pivot caught the overnight low within 1.10, generating a bounce of nearly $7. The futures have subsequently relapsed and are facing immediate jeopardy down to 1079.10, the p2 pivot of the pattern that produced p=1090.90. _______ UPDATE (7:45 p.m.): A small change: The futures face immediate jeopardy to 1077.25, but any lower would put a target at 1064.00 in play. _______ UPDATE (July 23, 10:55 p.m.): A nasty bar about 30 minutes ago crashed the 1077.25 support, shortening the odds of a finishing stroke to at least 1064.00. The futures would need to climb above 1089.60 overnight to get out of short-term jeopardy.
