A drop to either $1020 and $970 would crush any hope of a cup-and-handle or a double-bottom chart formation. Hopefully, that doesn't happen, Baires. Eyeballing the price chart, gold could fall to the $1080-85 range and remain in its upward trend from December 2015.

As to a resumption of the downtrend, I'm, of course, talking my book, but I just don't see it. Gold, since December, has been positive correlated with the U.S. Dollar Index. That's new, and may reflect increasing fear of counterparty risk by investors.

For completeness, I think the positive correlation between gold and the U.S. dollar only lasts so long. I expect gold to decouple from the U.S. dollar, once the Federal Reserve reverses course and the bond crisis shows itself not to be contained to oil companies.