The price of gold has clearly broken below $1300 and is now hovering above $1290. Although prices could find support here and start to rally, several short-term technical signals are now looking quite bearish in both gold and silver charts. Even more alarming (for gold and silver, that is) is the chart of the U.S. Dollar Index which shows that the dollar, despite its severely overbought state, is penetrating a strong level of resistance and may be breaking out of the confines of a restrictive channel range it has been moving in since early May. This is being supported by directional momentum in the dollar chart that is now 100% bullish. Because gold and silver prices usually move opposite the dollar, this dollar surge could push the precious metals lower. While it is sometimes possible for gold and the dollar to move up at the same time, this does not appear to be one of those times. I have therefore decided to bail out of my gold long positions today as bearish forces could take gold prices down to $1280 or even lower. We bought last Thursday around $1310 so the loss here is a tolerable 1%. Even if gold starts to rally now, we will probably be looking to short it at the end of the month and into early September anyway as there could be a major reversal in the precious metals market at that time. Selling gold long positions today.