Gold futures collapsed today, breaking through the channel on the bottom side, signaling a major move down. As we noted in our previous post: Gold Sideways Move Presents Trading Opportunity, Gold has been traveling sideways in a channel bounded on the bottom side by a low of 1268.5 and on the top side by a high of 1315.7.
Today, Gold prices tanked, going as low as 1264.5 for the August 2014 contract at the time of this post. Normally, when prices break out of a sideways channel, we go long or short with the expectation of prices moving up/down the same ‘distance’ as prices moved sideways. But we’re not going to chase this market. Prices moved suddenly and violently today so we want to wait and see if they climb a little first before we enter the market on the short side. We’ll see if we can catch it before it drops too far down. Stay tuned!