In the span of just a couple of days – April 12 and 15 – gold plunged tremendously, and in the TEN days it has had to repair the damage, it’s only managed to undo the drop from the 15th. The damage is severe and, in my opinion, simply part of a larger trend.
I have been waiting for gold to resume its swoon, but it hasn’t done so yet. I lost a few hundred bucks this morning with an attempt to short GLD, but it might have some more fight left in it.
Below I suggest four possible levels GLD could reattain. I think the highest level – about $!58 – is virtually out of the question, but I’ve put it in there as an extreme case. The next level down at about $151 seems the highest probability, particularly since it matches an important Fibonacci retracement level (not represented on this chart, although it is represented on the chart above).
I have re-entering a modest GLD short (430 shares) just in case we do start to sink, but I’m going to keep my bet size modest until this bounce is quite clearly over.