[isatrader]

Gold broke down and closed below crucial support last Friday on heavy volume. A potential stage 4 is in progress.

The fly in the ointment maybe the fact that Silver has held support in a similar chart pattern so caution should be exercised with this at the moment in my opinion. Besides the stop is 3.79(ATR200) so it is probably better to wait for a pullback to the BD level anyway for an entry point.

What do you think isa ?

Well as you noted in your daily chart, it broke down into early Stage 4A in December and went sideways for a bit before making it's first continuation move in February, and then consolidating again for another month before this latest continuation move. So it's already had a four month Stage 4 move to consider.

I'm personally leaning towards being very cautious here due to the large amount of false breakouts/breakdowns recently, as a lot of stops were taken out on Friday and so there could be a retest of the breakdown level straight away at which point you'll either get a better risk reward to go short, or the buyers will come in strongly looking to bottom fish like we saw on the Treasuries major breakdown in March.

I think it will be interesting to watch the US open, as GLD holders are a big part of the Gold market these days and so might have seen the headlines at the weekend and put sell orders in to be executed at the open on Monday. So if that does happen, then it will be important to see if it's absorbed by buy orders or not imo, as if it isn't then obviously Gold would be in trouble with the next support zone in low 1400s.

[Update]: Looks like it's tanked during the Asian session overnight and is already testing the low 1400s