April 15 Gold Prices

All of the financial media is reporting commentaries about what appears to be a crash in the gold market.

Those of us who have followed the charts knew since early 2011 that gold had hit a peak price and after a small pullback, there was a rally failure that seemed to seal the fate that a big correction was coming.

About a year ago I said that gold might pull back from about 1800 to as low as $1300 where I saw some significant support.

This morning, gold traded as low as $1380 and gold, as I write this, is about $1387. The $1300 retracement that I had been expecting is near.

A more cruicial question now is if gold will violate support at $1300 and drop back to around $1030-1060 which is where the recent bull run started back in August of 2009.

If you look at a chart you will see from late 2008 to mid 2009 a chart formation called a "reverse head and shoulders." It is also sometimes called a "cup with handle" formation. These are bullish formations on a chart and indicate that selloffs were arrested and rallies followed. This consolidation point is where there is significant support.

In the case of gold, the recent 5-year bull market started at this breakout point around $1030-1060.

In a worst case, I think gold might fall to $1030-1060 where it will find long term support. There very well could be panic selling till we reach that point.