Gold Traders: There Is Nothing To Support Gold

Gold traders are waiting for the gold price to burst out of the triangle pattern. Gold is too oversold and it needs to rebound before it can again start its journey south. One indicator gold watchers like Bankoff are eyeing is a triangle pattern that has formed for gold on a weekly chart (shown), and he’s waiting for that to either break out upward — in other words, turn bullish, or sink — a bearish signal. That triangle pattern broke down recently, turning a trendline of support into resistance for gold, meaning traders are watching for a retest and further gold direction soon. However the US Dollar and US Stocks keep on rising, the downside pressure will continue on gold.

Well this market analyst is adamant. He thinks that gold is too oversold and it should rebound before it starts falling again. This is what he says:”…according to the econometric tests to which I have subjected the 30 years’ worth of my sentiment data, the gold market performs appreciably better following low HGNSI readings rather than it does high ones. Contrarian analysis hasn’t always worked, needless to say, but it’s more successful than it is a failure…”

The technicals are in alignment with the fundamentals, according to Richard Ross, global technical strategist at Auerbach Grayson. “I think gold goes lower here in the short term and could go significantly lower in the intermediate term,” he said.But a longer-term chart shows gold going from bad to worse, Ross said. “This really hammers home the importance of that $1,180 level. On a break below $1,180, that would take us out of this descending triangle which has been forming for two years now. That’s a very bearish continuation pattern to the downside.”

From there, gold could fall to $1,000 per ounce, Ross said. His long-term chart shows that as having been the neckline resistance of a head and shoulders pattern in 2008-2009. From there, gold launched itself to record highs of $1,909 in 2011.