Gold prices are down 12 percent from a peak in October to about $1,583 an ounce. The fall has coincided with a surge in global stock markets amid growing confidence that the world economy has turned a corner and will remain underpinned by the ultra-easy monetary policy of major central banks.
As bullion falls out of favor in this "risk-on" trading environment, one expert says the market bears should think carefully about betting against the precious metal at a time when central bank demand for gold remains strong. It seems they are still pumping money into gold when it seems gold prices are so depressed.
Gold Bears might get a warning, but let us look at the chart to see what gold is saying.
The weekly chart in gold has the bears very very excited. And more downside could be on the way. But looking at the weekly chart in gold, things seem to be more on the oversold side right now.
The RSI, MACD and Stochcastics are all saying the bears have had a field day, in gold. We are not short gold, however I think the central bank is going to pull out more punches soon, and buy up more gold, and does so when prices are so suppressed. If this does indeed happen and the central banks do move in a big way, you do not need a stockbroker, analysts or so called guru to tell you. It will all come out in the chart first.
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