Last Monday I noted that gold was closing in on major support and for the bulls, the 1180 area had to hold. Well, today the sellers came out swinging and broke the contract through support. Next major support is under 1100 though some are clamoring about 200 day moving averages and H&S patterns. From what you can see on the chart, the range is clearly defined in my opinion and thus the analysis argues for a move to the 1070/1100 region.I would imagine the 13 month comes into play around the 1100 level. For the bulls, this level must hold because the 13 month has supported the contract all the way up. Generally speaking if the 13 month is taken out by month end or by the end of any month for that matter, the trend has changed. The S&P earlier this month closed a few times below its 13 month but will close above it now putting in a reversal. Breaks below this key MA and then back above are normally pretty powerful.
via StockCharts.com
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