I agree that it appears clear that on a technical view we are heading back down to $1180. At that point it becomes speculative. Market forces and the usual suspects may force gold down through support at the $1180 levels and we may see a significant capitulation in gold stocks.
I for one don't see the point in sitting in gold stocks experiencing your portfolio melt down as gold drops to $1180 then a possible washout after that. If we see capitulation or bounce off of support around those lower levels then its time to get back in.
We've experienced a rally in the USD which has provided some support to the gold price in the AUD hence firmness in Australian gold stocks but depending on your view this may be only a temporary development. Something to trade on.
If you have a look at a 5 year chart on the DXY you can see the run up in the USD in context over a 5 year period. My guess this is only temporary and will fluctuate on the jawboning by the FED in relation to an expected rate rise earlier rather than later strengthening the USD.
Personally I can't see an early rate rise and if they kick the can further down the road we will see the USD fall again and Australian gold miners will correct. My view is that the FED cannot contend with such a strong USD considering the significant debt and its impact on exports.
Now is the time to be in cash and sit patiently and wait for the opportunities that will arise.