Gold’s Death Cross Confirmed

The price of gold plummeted today with the rest of the precious metals and most commodities, confirming the death cross formation – the 50-day moving average moving down through the 200-day moving average.  I realize to some technical analysis seems like voodoo, but a large number of traders and some investors pay attention to this stuff, so it is worth watching and understanding.  We are at an interesting point on the chart, with gold diving hard through the 200-day, but also bumping up against some decent support around the $1,550 level.  If we crash down through $1,550, gold could go a lot lower.  The next support level would be $1,500, which we haven’t seen since the middle of 2011.  Weakening commodities should serve as a leading indicator for stock market direction, meaning a correction is indicated (strongly) by the recent weakening in commodities.

 

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