We have received numerous inquiries about Gold.
There are three technical details visible on the chart.
1. There is a “flag” formation (blue lines). Gold dropped below the bottom of this formation. This suggests an over-sold condition. However, even if the decline stops here, Gold will need time to find support and make another base (like it did during May – August 2012).
2. Gold hit ±$1550 twice in recent times (green line). Gold should find support at this level again, but will it?
3. Retest of a trendline.
Stocks and commodities that move above a downtrend line (red line), in this case at ±$1670 (black arrow) often decline to “revisit” the trendline. The downtrend line currently intersects at about $1550.
Conclusion. The current technical picture is negative. A short-term rally may occur, but it will take time to find a base. Therefore it is too early to conclude where the current decline would culminate, or the time needed before the next upleg could commence.
There are three technical details visible on the chart.
1. There is a “flag” formation (blue lines). Gold dropped below the bottom of this formation. This suggests an over-sold condition. However, even if the decline stops here, Gold will need time to find support and make another base (like it did during May – August 2012).
2. Gold hit ±$1550 twice in recent times (green line). Gold should find support at this level again, but will it?
3. Retest of a trendline.
Stocks and commodities that move above a downtrend line (red line), in this case at ±$1670 (black arrow) often decline to “revisit” the trendline. The downtrend line currently intersects at about $1550.
Conclusion. The current technical picture is negative. A short-term rally may occur, but it will take time to find a base. Therefore it is too early to conclude where the current decline would culminate, or the time needed before the next upleg could commence.
