Gold looks to be at an important price point. On Friday the metal closed the week below the 1185 50% retracement of the low from 1999 and the high recorded in 2011. With big long-term retracements I have found that it usually pays to give the market a little bit of room. Rarely will an instrument respond precisely to one of these levels, but the zone surrounding it is usually pretty important. Downside follow through has so far been limited and remains well within the “envelope”. The clear risk here is that we get some separation away from 1185 which in turn triggers another aggressive decline as the metal seeks equilibrium at lower levels. The year-to-date low around 1073.50 is an obvious pivot as a daily close below would be a clear downside trigger. Traction over 1100 is needed to alleviate this immediate concern.

The timing side of the equation is not dire, as there are a few key minor relationships aligning around the latter half of the week that could prompt at least a minor change in direction. Seasonality is also positive around the second half of November However, we have seen this movie before as Gold has ignored a few key timing relationships and seasonal tendencies over the past couple of weeks. Continued weakness past the end of the week would invalidate this potential positive timing.