Gold is heading towards 1000 according to Michael Macdonald, Director of XATS, a UK-based technical research consultancy.
Macdonald uses a 3-monthly chart to simplify price action, citing several technical features that suggest downside dynamics are dominating for Gold:
1) Last quarter, gold broke out to the downside from a two-year triangle pattern
2) It subsequently tested the 1085 level – the 50% retracement level of the 1999-2011 rally
3) Price is below both the 21-week and 55-week moving averages
4) Technical studies, such as Stochastic and RSI, are pointing downwards
Macdonald says that only a clear break above the triangle base at 1180 would stabilise price action, but “this is looking unlikely.”
Read full report.