Down-leg Completed in Gold

Spot gold plunged to a new reaction low at $1573.01 in overnight trading, but has since rebounded to $1582/83. On further inspection, let's notice that the overnight new low hit and reversed off of the lower "support" line of the March-May down-slanted channel ... amidst a glaring 4-hour RSI momentum divergence.

My pattern and momentum work indicate that the down-leg from the May 1 high at $1672.10 to today's low at $1573.01 has the right look of completion (notwithstanding the likelihood of a retest or even a press to a marginal lower low).

That said, to confirm that a significant near-term low has been established in gold and the SPDR Gold Shares (GLD), spot gold must hurdle and sustain above $1602 and preferably above $1609.

Inability to do so will leave the price structure vulnerable to additional weakness that projects next into the $1560/55 target zone.