One other extremely important point for the gold bears--and this is consistent on all three time frames--is the direction that the indicators are pointing. On all three time frames the daily, weekly and monthly charts, the 10-, 20- and the 50-period SMA and the bottom line of the BB's are all pointing down. On each chart the top line of the BB's is not. However, that is 4 out of 5 of my 10/20/50/BB Trend Finder indicators all pointing bearish.
On the monthly chart below, gold has taken out every previous low from what my indicators are showing me except for the one made back in October and November of the Great Recession. In October of 2008 we saw gold prices bottom out at about $681/ounce and in November before price rallied up to an all-time record high of $190/ounc--then it bottomed out at about $698/ounce.
Can we go back there? Is that even realistic? Well, if you look at the monthly chart below you will see that we have taken out every low except those. Finally, of course it could happen. As I remember when I got into the business in 1998, gold futures were at about $250/ounce. For now the bears are firmly entrenched and so is the deflationary tone of all the commodities markets so stay tuned for the next big move!
Option play: Some good plays I think could be to buy puts or bear put spreads with a call for a hedge or an "insurance" policy in case the trend changes to up dramatically. I would recommend this in a 3 to 1 ratio as always. Buying puts or bear put spreads have a limited risk. Another play could be to sell deep out of the money calls with GTC stop orders to buy futures at a higher price in case the market rallies.