Gold Breaks Below Key Support Level - Significant Losses Now Possible

Gold had a strong selloff on Tuesday of last week (November 5th) when the price opened near the 50-day moving average and then promptly collapsed all the way down to around $1482. It ended Thursday below a key support level at about $1480 that had supported the gold price for multiple weeks. To make things worse, it then ended the week below the next support price of $1465.

From a technical analyst's standpoint, the gold market looks like it has put in a top. Fresh news on the trade war front or some other type of black swan or geopolitical event could change things next week. However, as of Sunday November 10th, the short-term situation looks dire for gold bulls.

To make things even scarier, the number of speculative longs in this market remains at extremely high levels. If these hedge funds begin to bail on their long positions then we should see gold work its way down into that rectangular congestion zone that starts near $1440 and extends down to near $1410.