Gold is clearly broken but its decline is due for a pause. Gold has been strongly correlated to the bond market which may have made an interim low last Wednesday.
There were some hopes that a non-move by the Fed would end the current correction in precious metals and spark a move to new highs. Unfortunately, the Federal Reserve cannot override the supply and demand component of the market.
The amount of Gold in GLD has risen steadily even as Gold consolidated a few months back and has been stable in recent weeks even as Gold and gold stocks correct their Brexit breakouts.
Given the reaction to the jobs news, the probabilities say the juniors are more likely to follow the red path (2009) or something close to it then the blue path (2001).
Despite maintaining an overbought condition and despite the recent bearish posture of many sector pundits, the gold stocks have yet to correct more than 11%.
