Gold futures were pounded lower Tuesday morning, as the precious yellow metal is caught firmly in the under-tow of sinking crude oil prices. December gold is in a five-month-old downtrend from the May contract high of $753.00 an ounce. The next downside technical objective for the gold bears is the September low of $576.60 in December futures. Below that lies solid chart support at the June spike low of $557.10.
click on the chart to enlarge
A close below the June low would produce very serious near-term technical damage to suggest a challenge of major psychological support at $500.00 an ounce. For the bulls to regain some near-term technical footing, they will first have to push and close December futures prices above psychological resistance at $600.00 an ounce. Above that lies solid chart resistance at last week’s high of $612.40. And above that lies solid technical trend-line resistance at $625.00 an ounce. Veteran gold market bulls know their fate will continue to be tied to the price of “black gold.” If crude oil cannot make any sustained and strong price recovery in the coming weeks, then it’s very likely that in May the gold market put in a major market top.
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