Head and shoulders neckline being challenged. Potential target $1120.

Gold's head and shoulders neckline is being challenged. The potential target is about $1120.

See chart below. Measured on the chart right now, I get a target of $1119.

Rick Ackerman on kereport.com gave this as potential target of $1120 for gold a number of days ago. It may either be from a similar pattern or from the 18 month long $1520-1920 trading range being mirrored on the downside to $1120-1520.

Either way, it is not bullish!

The neckline shown in heavy dashes should act as support because it is a multiple prior support line. If it is broken then look out below. The previous short dashed line has already broken down but came back. False breakdowns are of course possible.

The height of the left and right shoulders above the neckine is about the same. Treating those as the top of a trading range would give a downside target near $1190, almost down to the 28 June low if the neckline fails.