Gold rallied up to test major support/resistance near $1310 and has proceeded to pull back $20+ overnight:
The significance of the $1310 level cannot be overstated; it served as support throughout the summer, the breakdown in early October took place after $1310 was breached, $1310 represents the 61.8% Fibonacci of the entire May-July rally.
It's normal for price to consolidate after such a large move and a test of a major level. However, we do not want to see price drop below $1290 for too long or else it could mean that the snap-back rally is over.
$1290 is key to remain constructive on a weekly closing basis, >$1300 on a weekly closing basis is outright bullish. It's worth nothing that gold miners appear to have been sold disproportionately hard yesterday after gold weakened a bit. It will be interesting to see how the miners fare today after support at $1290 appears to have held up.
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