As gold's trend line fails, the bears smell blood. And now, $1,285 to $1,280 is in the cards.
Gold plummeted through $1,352 early in Thursday's session, and even found itself trading below its 50-day moving average at $1,331.80 for most of the day. Thursday's floor trading session closed at $1,330.60, but gold finished the electronic session with a bounce off of $1,320, which only served to set it up for a further washout overnight.
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With an overnight session high of $1,330.80, traders can see how Thursday's floor close and 50-day moving average came back into play as a strong resistance level. When gold touched that level overnight, it gave aggressive bears one last shot to sell.
Gold's low in early Friday trading was $1,304.60, which is below the $1,308.60 retracement-related support level. The momentum is undoubtedly to the downside, and we have consistently said that a close below $1,352 will put $1,300 into the cards within the next session or two.
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