Study: Gold is about to make a Death Cross. A short term bearish sign for gold


Gold is on the verge of making a “death cross” (when the 50 daily moving average falls below its 200 daily moving average). It will probably do so early next week.

Conventional wisdom states that a “death cross” is bearish for the market. Is this true?
Here are the historical cases in which gold made a “death cross” for the first time in 6 months, and what happens next to gold.

Click here to download the data in Excel.

Conclusion

As you can see, gold tends to make a lower low sometimes within the next 2 months. The only cases in which gold didn’t make a lower low were:

  1. November 14, 1973
  2. March 1, 1988
  3. June 9, 2004
  4. October 24, 2006

In other words, gold made a lower low some time in the next 2 months in 18 out of 22 cases (82% of historical cases). 
A logical target is for gold to retest its December 2017 lows.

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2 comments add yours

  1. Hi Troy,
    Do you think this is just a short term bearish or mid-long term bearish?
    Thanks.
    Alex

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