We saw last week that the price of Gold doesn't necessary move in a single direction. It could well be the onset of a bear market with deflationary forces so strong that it could make 2008 look like a walk in the park. This time, it is not banks and corporations that will go bust but sovereigns that were once deemed "too big to fail".

The gold's 3 year chart doesn't look too shabby with investors of the yellow precious making some hefty profit these past few years. However, the recent fall below the 200-day moving average does not bode well for gold on a technical perspective. Similar developments on the charts for silver and other commodities suggest that gold is in the process of completing a bearish descending triangle.

Momentum shown by the MACD shows further bearishness and failure in maintaining key support level around $1,600 level will lead to a severe decline, possibly to the $1,300 level.