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Massive outflows have taken place in the Gold & Silver complex over the past few weeks, causing large declines. Gold found its 23% Fibonacci level to be support for almost 18 months, once it gave way, selling ramped up. The decline has Gold hitting a support line, at its 38% Fibonacci level with momentum very oversold in the chart above.
Joe Friday says…..The set up in Gold would suggest that a counter trend rally could take place in Gold, due to this situation. This set up is more geared for shorter term traders at this time and one would want to have adequate stops below the key support points to protect oneself if the 38% level fails to hold.