Gold continued its spiral lower to multi-month lows today, reaching its lowest level since the first week of January and opening up a real threat to the psychologically-important 1200 figure. Commodities prices continue to depreciate as global demand ebbs and deflation takes root in several major industrialised countries.
Gold gobbled up $7 in stops in about 1 hour earlier today. In the Daily chart below, we can see the intraweek high of US$ 1233.80 and when we use that level as a High point and extend retracement levels downward so that they coincide with yesterday's high of 1226.00, we note that 1213.62 and 1208.82 levels are key downside targets.
In the 5-minute chart below, we can see that Gold held right above the 1213.62 level for hours and eventually triggered stops below the area, pushing Gold lower to the 1208.82 level where it bounced higher for 25 minutes. When stops were finally reached below the 1208.82 level, Gold was pushed as low as 1206.80.
Gold took out about $7 in stops in about 1 hour in a very technical move.
Further downside targets include 1201.07, 1200.39, and 1182.45.
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