Gold Heading Lower

I think the triangle consolidation in gold I speculated about last week is now finally off the table. Gold is breaking down of feeble three week consolidation and now it should only be a matter of time before the black support line gets broken.

With some benefit of hindsight I can say that the rally has been doomed from the beginning, which I pointed out several times. 13 weeks is way out of normal timing band for intermediate lows and a plunge of that magnitude could not recover that easy. However, I still expected that gold will pullback up to arround 1800, which teased me to buy some SLV. Needles to say I got stopped out. The weakness of this rally indicates that the black support line should finally get violated, which means that gold will have to find new support lower.

If we get back to the September 24 post, when we draw some support lines, we can see that gold should now look for major support on green line at about 1500 and then lower on pink line at 1400. It's impossible to say which one of these lines will hold. My plan is to wait for a tag of 1500 and if price rebound, buy some. If I get stopped out, another buy point is 1400.

All in all, gold is still in a downtrend and in a sell mode as of today.