Gold is about to lose even more value than it’s lost in the last four months.
At least that’s the strong indication from how its price, in New York trading, is moving right now. As of Wednesday, the metal's 50-day moving average has fallen below its 200-day moving average.
Technical analysts call that a “death cross” because historically it signals an acceleration of price declines.
Further, a death cross marks a new technical ceiling that the price of gold will bump into, so to speak, once it finally reverses direction and starts to rise.
On Oct. 5 bullion closed at $1,800.60 per troy ounce; on Friday it closed at $1,609.50, a low not seen since mid-August. On Tuesday the price closed at $1,604.20. On Wednesday it had fallen to $1,592.10. In other words, the price of gold has lost more than 11 percent in the last four months.
Analysts point to the Federal Reserve as part of the reason for gold’s death cross.
“Bullion may face further pressure should the Fed reinforce their earlier statement towards quantitative easing, in our view,” James Steel of HSBC said late Tuesday. “We see gold as likely to face further near-term pressure until physical bullion buying from Asia improves."
Mike Obel assigns, edits and writes stories about business, markets, finance and economics. Before coming to International Business Times, he worked on the Finance Desk of...