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SGOL
In the past 5 days gold has fallen approximately 14% from its highs.
Reasons:
* Early last week GS asked its investors to sell gold based on broad economic indicators. Targets 2013-$1450 and 2014-$1270.
* Global crises with the Euro bailout.
* Cyprus dumping 10 tonnes of gold to support bailout. Sparks mass selloff and a chain reaction.
Gold has been oversold beyond limits as pointed out by this chart:
|
Gold is oversold - 4.5 times standard dev below 50DMA |
Gold has fallen over 4.5 standard deviations below its 50 day moving average (DMA). It has fallen below the 4 standard deviations mark only 10 times since 1975. This may be a good time to buy?