As oversold as the metal has become, I wouldn't be surprised to see a bounce from here. The four hour chart that you see below gives a more accurate measure of price action for both intra-day and daily time frames. If you notice, each swing low is becoming less dramatic, which indicates that the sellers of gold are diminishing in the short-term. Do take in mind that prices still may want to go slightly lower before establishing a short-term bottom.
I've said it before, and I'll say it again. I believe the market is carving out the Head of a Head and Shoulders Top. Do understand that it takes time for these patterns to fully play out. Plus, following a multi-month rally in stocks, it only makes sense to look for a topping pattern given the overbought and diverging indicators that you see in the chart below.
Finally, stocks making new highs does not seem to agree with the price action of the overall market. This particular internal indicator reveals the anatomy of stocks within the stock market averages. The chart below reveals a notable divergence of stocks making new highs from the October peak.
The High-Low Index
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