The red and green signal lines represent the maximum (over the prior 200 days) spread (green: negative deviation, red: positive deviation) between spot and its 20d, 100d and 200d moving averages. Earlier in March, gold's rally pushed these negative deviation spreads to new 2015 highs. Since then, however, the price action has rolled over, coinciding with the dollar being bid over the last few days.
These indicators act as oscillators, so when the upside boundaries are tested, we expect the downside boundaries to follow. In the last year, we've seen four positive (sell) signals and three negative (buy) signals. The fourth negative (buy) signal is on its way.
From where we currently stand, a ~7.5% decline would only bring us back to the lower bound of the max negative deviation from the 20dma. Gold is clearly displaying asymmetric risk in the short-term. There's a lot of room on the downside to accommodate a large, sustained move lower. While there appears only to be a little more wiggle room for gold to move higher.