It is apparent that someone was not too happy with a brand new all time high in gold today. It was stuffed back into its box quite unceremoniously I might add.
One can tell from looking at the volume that all of the new longs that bought the breakout of the nearly month long congestion pattern have been handed an immediate paper loss thanks to the barrage of selling.
It will be up to the bulls to hold the line near $1420 or the technicians are going to have a field day trumpeting a false breakout which will engender some further long liquidation, especially because we are entering a rollover period – a favorite time for these bear raids to occur in the past.
If the bulls can hold $1420, they will be okay. If they fold here, the price is going to drop back lower into the former congestion zone and will more than likely test $1410 again.
Either way the price action is not encouraging. The HUI is not helping matters either as it too is puking. Silver also is now looking like the longs are bailing. It needs to hold $36.50 on any further downside move.
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