Purely from a big picture, technical perspective, all of the weakness in Gold off of its July high at $1375.53 has carved out a corrective pattern into yesterday's low at $1281.98 (so far), which we notice has returned the price structure into the area of its May-June support and upside breakout zone at $1200-$1300.
In addition, $1200 to $1300 represents multi-month support stretching back to mid-2014!
Right now, I am viewing current weakness as a flush-out of entrenched longs ahead of another upleg in the Gold bull phase that began at the Dec 3, 2015, low of $1046.20. What about the perceived rise in rates on the long end being a dampening factor for Gold?
The pattern of 10-Year Yield off of its July low at 1.32% looks corrective into its recent high at 1.75%, which means that in the absence of a climb above 1.75%, Yield is more likely to pivot to the downside again in a retest of 1.32%.
Perhaps the reaction of the markets to this Friday's Jobs Report will be the directional catalyst for Yield, and by inference, for Gold too?
