- Massive profit-taking over last few days brought on by the need to divert funds elsewhere as well as another change in margin requirements
- Asian central bank bids failed to appear, setting off panicked stop-loss selling
- Physical demand remains solid, although not big enough to soak up leveraged sellers
- No change in fundamental reasoning behind the Gold play in that central banks are still printing money to try and make debt and liquidity issues go away
Any market that falls so hard and fast is trying to tell us something and more losses are certainly possible. A lot will depend on whether the ACBs resurface and start buying Gold again. This $1625/$1650 level was supposed to be support on the way down. If the market cannot break convincingly back above here, then I’d suggest we may be in for some more downside. If we break higher and form daily support above there, then the worst is probably over for the bulls. Watch and wait brief for now (although I’m reinstating 50% of my hedge just in case)
