Just a quick update to our last update [see: Sep 20 Update on Gold] as GC has reached our initial downside target.

continued for members…

GC has tagged the SMA100 as well as backtested the TL extending down from the Sep 2011 top at 1923.70.  1264.50 would be a better bounce spot, but it could happen anywhere in here.

It could theoretically backtest the broken white channel at 1380 (+8%) where it intersects with the neckline of the big IH&S Pattern, and that would jibe nicely with my bearish views on DXY.  But, it would need to get started right away, as the intersection is around Oct 12.

Bottom line, this yellow TL is extremely important.  You could play the bounce, but be prepared to blow it out on a drop through the TL and/or the .618 at 1264.50.

A close-up… …and the big picture.