Monday, April 22, 2013

And Now for Some Bearish Views on Gold

The below analysis comes from stockcharts.com and provides a bearish technical take on gold.....

In the last few weeks gold has experienced a major breakdown, and, of course, there are many opinions as to what will happen next. Let's take a broad look at the technicals, so that we have some context for making decisions.
The daily chart shows the critical break below long-term support at about 1540. The bounce off the low is unlikely to be the beginning of a new rally, rather we think it is a short-term consolidation, like a reverse flag or pennant.

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The weekly chart gives the best view of the trading range that has kept prices contained for over a year and a half. We thought that this was a price consolidation that would eventually lead to higher prices, so the failure of support was disappointing and has very negative long-term significance.

More after the jump....

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