Not much going on this morning. Gold (December) reached $1241.20 as the stock market sank to fresh lows. Stocks are attempting to recover, and gold is backing off…for the moment.

After reaching $1243 on Tuesday gold has been consolidating in a small triangle formation. Prices will likely break higher from the pattern on additional stock market weakness. If the stock market stabilizes, then gold would presumably break lower. To establish a short-term breakdown, gold would have to decline below $1232 and then $1228. Prices would have to close below $1224.50 on a daily basis to support a cycle top.

I’ll monitor the open and update again later.