Paper gold is not acting dead, yet. As a former trader, I see nothing particularly alarming when looking at the long term Gold Chart. Price is right at the lower boundary of a trend channel that has been in place for over a decade. For the status quo to be maintained we would expect a rally back toward the middle of the channel, then a series of higher lows that stay within the confines of the channel. If that does not occur, I would say the character of the trend is definitely changing.
In order for me to say the bull market in paper gold is over, I would need to see a move down through 1300. That would be a Fibonacci 38.2% retracement and a move through that level violates strong natural support in the bull market. The only time we have seen that kind of retrace was during the crash in 2008, and then there was a very strong V bottom reaction after the 38.2% level was briefly breached. That reaction solidified the notion that market was inherently bullish and the weakened price was refreshing the trend.
A move through 1300 without a strong buying response similar to what was seen in late 2008 and 2009 suggests an end to the bull market in paper gold. Since I do not see fundamentals for gold changing, as a result of a miraculous resolution to the $IMFS crisis, the need for gold will remain. The lack of ability of “gold” to adequately satisfy the need for gold will be reflected. I expect this to be a sudden realization and not a gradual one. That should provide an exclamation point in the form of a waterfall and should set off a stampede. It will not be hard to miss and we will not be asking whether this is the end of “gold.”