Gold broke out, but don't be a long term bull


Gold has spiked above its 50 daily moving average for the first time in almost 6 months. (data from StockCharts)

When gold rises above its 50 day moving average for the first time in 5 months (i.e. after a long downtrend), gold’s long term outlook is not very positive.

As you can see, there aren’t a lot of historical samples here. This is what happens to gold when we relax the parameters (first close above 50 dma in 4 months).

So why is gold’s long term outlook bearish? (Even though gold might make a medium term rally)? Because these kinds of long, non-stop downtrends are not characteristic of a bull market. They’re characteristic of a precious metals bear market.
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