Basic Technical Analysis
Technically, gold is at 127% extension of the summer lows to the summer highs. We are in a strong downtrend, but we need to point your attention to a couple of things. a) the RSI looks to be oversold and divergent, which suggests new lows from current levels will be a little tougher to accomplish. b) While gold keeps registering fresh 10 month lows, silver has not followed and we need to stress that divergences like this, can often be found near market turns. If the gold market can hold $1150, a recovery back above $1200 would be a good sign we may be headed back to attack the multi year trend line near $1300.
Harmonics analysis is more bearish on Gold. Like many we expected the sharp sell off after the US election to find some support in the $1172 area but the failure after a few attempts to hold this support means that $1172 is now resistance and we look for a drop. The target is at least the $1116-$1120 area but more likely $1085, where we see a bullish bat pattern. Bat patterns retrace hard and we should then see a $100 jump from there to $1182. In the bigger picture we still like selling rallies.