I've been out all morning but watching events from my iphone. Yikes! I was afraid that the selling in everything else would eventually spill over into the PMs. Sure as heck it did! The question is...now what?
Though I'm confident that The Cartel has helped things along, the steep drop today is undoubtedly caused by the liquidation trade. With some global markets declaring a "holiday" and with equity markets sharply lower, even the strongest hands in gold are tempted to be the first to lock in gains. Once the selling starts, its accelerates and cascades and you get to where we are. No doubt many will declare "It's 2008 all over again" and "The gold bubble just popped". The answers are : NO, IT'S NOT and NO, GOLD IS NOT EVEN IN A BUBBLE.
That said, gold definitely reached the top trendline on this chart today and it is about to paint an Outside Reversal Day on the chart. This means we've probably made our short-term high. Probably.
I'm in a rush to get this posted so, instead of new charts, here are reprints of the charts I gave you late yesterday with projected support levels where you could do some dip buying, if so inclined.
As you know, silver blew clear through that first support level and traded as low as 39.18! I'd have expected the area around $39 to be the next support level. Let's see if it can rally into the close and make it back above the old bogey of 39.50. I have a last of 39.62 so it's going to be close.
Dec gold hit 1642.20, right in the middle of the support zone, before rebounding. I have a last of 1655. I would not be surprised to see gold break through that support if this global selling continues so, for now, I'm not buying. I'll wait to see if a dip develops back to near 1610. IF it does, I'll be all over it.
Lastly, this IS NOT 2008 all over again. Central Banks are ready and willing to flood cash to stave off a liquidity crisis. Gold IS NOT going back to 1200. Silver IS NOT going back to 20. Anyone that says so is a fool with an agenda.
More later. TF