There is no doubt that today has been a very bad day.
As I write (4:20 PM US ET) there appear to be at least two dead and dozens injured in Boston, at the Finish Line of the Boston Marathon. There were two explosions, and the police apparently found another (unexploded) two bombs in a hotel nearby. No reports, yet, of who did it... News updates continue to come in.
US stocks (DJIA) took a 260 hit as well, its worst drop of the year...
Things went badly in the gold trading arena as well. The below "two-year" chart is from stockcharts.com, and shows what has happened in the past two days, a huge price plunge (as with all images, *click* on any image for a clearer view). It is a weekly chart, and so shows the price drop of last week and Monday (first day of this week):
Because I was unable to round up either of my two friends to give me a "technical take" on the price of gold, I will take a crack at it. I do not do Technical Analysis and have grave doubts as to how much predictive power such analysis has, but I respect my friend who is apparently very good at it. I hope I can convince him to share something with us soon.
The below charts are the same as the above (enlarged), but with my annotations (again, click on chart for a clearer view):
The vertical green line shows where "paper gold" was in late March, when I "got out of the prediction business". The horizontal green line (lower) that shows closing price and "weak support" around $1361. The brown horizontal line shows a "possible quadruple bottom" (defined loosely, smile...) and how the price of gold just sliced right through it... My friend Ralph has told me: "There ain't no such thing as a quadruple bottom." The top (diagonal) brown line tracks the two most recent highs, I often see that line drawn by technicians...
The below is the same chart showing some other annotations. At the upper right is stockcharts' Relative Strength Index, it shows that gold is somewhat "oversold"... That does not mean it cannot become even more "oversold" in the coming days... Similarly, at the bottom right shows the "MACD", also showing a technical "oversold" condition. Finally, today the gold price sliced through the 200 Day Moving Average, a somewhat bearish indicator as well.
Please note that I had NO IDEA that this kind of a drop was in the cards... Yes, I did read at Zero Hedge that our friends of Goldman Sachs advised clients to sell gold short last week. Maybe Goldman finally made a good call re their "muppets" (derogatory term for customers, I believe it was someone at Goldman that coined the term).
Please also note that my technical trading friend will likely skewer me for writing this!