Gold prices declined eight sessions in a row in a collapse from the $1,300 level toward the $1,200 target.
Let’s update our Gold(NYSEARCA:GLD) charts to highlight these reversals and note the current target and plan:
Late 2015 gave us a lengthy “Rounded Reversal” or “Arc Trendline” Pattern just under the $1,100 level.
A reversal and breakout in February – on higher volume and momentum – thrust price up to our extension target into $1,300.
From there, a similar Negative Momentum (and Volume) Divergence developed into the $1,300 level.
Our game-plan was to be cautious/bearish into this level as a reversal was likely.
We’re now seeing that reversal (deeper retracement) achieving its target sooner than expected.
From here, we’re focusing on the $1,200 per ounce “Round Number” Reference Level (yellow highlight).
Watch for any bounce/rally (retracement) up away from this key target level as the next likely swing.
Otherwise, commodities can trend (reference early 2016) especially when they break through key levels.
For now, that focal point is $1,200 and we’ll plan to trade the next movement away from this level.