Gold price was in news a couple of weeks ago when it cracked sharply. There has been enough said and written about the outlook for gold and I thought I should not be left behind and decided put some digital ink to use to pen my observations. Let’s begin with the monthly chart of gold.

Featured in the above chart is a set of action-reaction lines with the thick green line being the centreline. Price has reached the upper blue reaction line in September 2011 and has since been in a major downtrend. The price now is back at the green centreline and this line is acting as support thus far.

Let’s take a closer look at the monthly chart.

Notice how the price accelerated and then slowed down as it approached the major support in the monthly time frame. The twin support from the centreline and the shaded turquoise zone has resulted in the deceleration in price. If the turquoise shaded band in the monthly chart is breached, gold could then drop to the major balance line at $1,033.

Next up is the weekly chart with a few observations.

It is not surprising that the price has halted at the medianline of the downsloping blue andrews pitchfork. If there is a recovery in price, the level of $1,130 would be first hurdle for Gold. Time to take a closer look and direct your attention to the daily chart featured below.

Notice how price has respected the Blue Schiff Pitchfork. Price has been clustering near the lower parallel which also coincides with weekly and monthly supports detailed earlier. Given confluence of support, it is not surprising that the fall has decelerated.