by Pebblewriter, Pebblewriter.com
The big story this morning is the meltdown taking place in the commodities complex. Gold is especially taking it on the chin, continuing the plunge that started on Friday with the critical loss of the LT channel we discussed last week, the horizontal support at 1520-1535, and the psychologically important 1500 level.
Click on any chart for larger image.
Recall gold had a nice bounce on Apr 4 at 1539, the bottom of the channel and the horizontal support of several prior bounces. In a dramatic demonstration of what happens when channel support is lost, it has since shed 205/oz.
The next best available channel is well below the current one, but supports the idea of a bounce at 1379 or 1359 — the Bat Pattern and Crab Pattern completions shown in the first chart above.
If those levels should fail to hold, the next major support levels are 1309 and 1155.
UPDATE: 11:40 AM
Gold just reached the bottom of our target range from this morning: the Crab Pattern completion at 1359. It should reverse here. But, again, a failure to hold could easily send prices down to 1309.
It’s interesting to see what the US dollar has done during this sell-off. Instead of reflecting a risk-off posture and rallying strongly, it has continued to drift mostly sideways to lower.
