Gold has just made a “death cross.” Is it something bullion investors should worry about? The “death cross” was formed when gold’s 50-day moving average crossed below its 200-day moving average. Ari Wald, head of technical analysis at Oppenheimer & Co., says it’s all much ado about nothing, but that doesn’t mean he’s bullish on gold.
“It does sound terrible,” Wald said. “The thing with the ‘death cross’ is that it’s a very late signal, for one. Two, it doesn’t work very well in these sideways ranges.”
Wald is bearish on gold because it is headed back toward the lower end of its recent trading range at $1,200 per ounce. “The destruction we saw last year in the first half of 2013 needs a lot more time to stabilize,” he said. “You can see gold’s 200-day moving average is really just starting to move sideways.”
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Related: SPDR Gold Trust (ETF)(NYSEARCA:GLD), ETFS Gold Trust(NYSEARCA:SGOL), Direxion Daily Gold Bear 3X Shares(NYSEARCA:GLDS), Direxion Daily Gold Bull 3X Shares(NYSEARCA:GLDL), Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX), Goldcorp Inc. (USA)(NYSE:GG)