Support breaks as gold tumbles
Gold is ending September at the lows of the month.
It has extended today’s brutal slump to $32.30 in a fall to $1464. It hit a 7-year high of $1557 at the start of the month but a turnaround in US-China trade talks kicked off a wave of selling and it despite a bounce around the Fed decision, it never fully recovered.
I highlighted the head-and-shoulders top earlier today with a couple potential interpretations. No matter how you draw it, however, it’s broken now and the measured target is $1400.
The lone caveat is that today is quarter-end and that can send some counter-trend signals. Gold is still up 4% quarter-to-date and there might be rebalancing demands or cash demands; plus there is a holiday in China.
What I think could happen is that this slump extends quickly, sparking a sharp squeeze. If so, I believe anything close to $1400 is a place to buy.