Spot gold has traded consistently lower on the day dropping twice in quick rushes after hours of seemingly indecisive range trading. First the metal failed to hold the $1425 level in Europe and then in New York where the $1410 level proved just as insubstantial.
Both breakdowns came after prolonged movement above and occasionally through the two levels. The New York plunge to a low of $1390.60 was the first break of $1400 since April 19th. That day's low of $1385.98 should offer initial though weak support. Below that are previous lows of April 18th at $1339.01 and April 16th at $1322.06, also the 2013 low.
Because all three dates were the lowest the precious metal had been since late January 2011 they are unlikely to offer anything more than a brief technical pause. The next substantial support is at $1262.00, the top of the range from June to September 2010, and until the break in mid-September, the historical top as well.
Chief Market Strategist