Gold futures suffered a sharp fall overnight which broke through a key area of support:

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Gold 1-minute (December futures)

GC_futs_overnight

Gold 4-hour (December futures)

Gold_4-hour_8.21.2014

Gold now finds itself at a crucial juncture as it tests the bottom rail of the large symmetrical triangle:

Gold Daily (December futures)

Gold_Daily_8.21.2014

Less than four days after we offered the probability that a big move was brewing for gold the gold market responded and now faces its biggest test of 2014. A decisive move below $1270 would indicate that the ultimate lows for the correction which began in September 2011 have not yet been put in place. This situation bears watching closely and it is quite likely that volatility in the gold price is just beginning to ramp up again after an extended period of relative calm:

GVZ (CBOE Gold Volatility Index)

GVZ