Friday's close will be critical for gold.
Although gold was able to recover from the lows it made toward the end of Thursday's session and into Friday's, the nearly $20 selloff took a lot of wind out of the sails for the bull camp. Gold has continued lower, as it tried to hold major support at $1,437.50 to $1,438.80 once again, but as the old saying goes, the third time's the charm.
After recovering above resistance to reach a trading high of $1,461.20 Thursday night into the pocket of that day's initial lows, outside markets helped to add to the downside pressure.
Now that the market is below the major $1,437.50 level, and running stops, look for the next level of support to come in at $1,428 Friday.
However, the move below $1,437.50, and now the inevitable violation of our $1,437.50 to $1,487.50 range trade (which was fun while it lasted) will turn this market immediate-term bearish, likely bringing the market to the $1,402 to $1,404.20 level.
If gold closes below $1,437.50 or $1,438.80, the ultimate downside target becomes $1,383.90. A hold and a close back above here, and furthermore $1,444, will be crucial in order for this market to repudiate this early negativity.