Has The Triangle Pattern Just Put In A Top?

XAU/USD (Gold) - Has The Triangle  Pattern Just Put In A Top?

Gold tested the top of the triangular consolidation pattern on both Friday and Monday, drawn from the 6/6 high, between $1625-30 and then finally broke to the downside (below $1600) today after better than expected U.S. data emerged at 8:30am ET - July Retail Sales rose +0.8% MoM (cons. +0.3%) & the Producer Price Index climbed +0.3% MoM vs. expected +0.2%. This resulted in a stronger USD across the board as some traders began to push back their expectations for further monetary stimulus, namely additional Quantative Easing (QE3), from the Fed. XAU/USD’s technical landscape on Friday suggested this could be the case - See TECH TALK: Commodities, and so far it continues to play out nicely. Gold’s Key Technical Bullets: Has not been able to close above the 38.2% retracement around $1628 for several months Daily 144 & 169 EMA’s continue to prove resistive, meanwhile the 13-day sma still remains below (bearish) Triangle pattern appears to have put in a wave-c top of the 5-wave consolidation Daily RSI failed into the key 60/65 level on multiple occasions (bearish) RSI appears to be breaking below corresponding trendline support IN ADVANCE to price (leading indication?) That being said, since the move prior to the consolidation was lower, it suggests a downward break is more likely. Thus, keep an eye on the prior low in August around $1584/85 initially and then triangle support around $1570/75 over the next few days/weeks. Personally, I wouldn’t be surprised to see this hold on the first attempt and gold could potentially even rebound back towards the $1600 level (wave-e?), however it should then roll back over once again - Likely sending the precious metal back towards the 2012 lows near $1525/30 (and potentially even breaking it) before finding a more meaningful bottom.