The bearish technical chart formation known as the "death cross," in which an asset's 50-day moving average falls below its 200-day moving average, is not the coffin nail for the gold bull market that so many bullion skeptics are trumpeting. That's the conclusion of Wall Street Journal writer Steven Russolillo in his piece titled "Gold's Death Cross May Not Be So Bearish":
Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, points out gold prices have historically held up fairly well after the notoriously bearish formation takes place.
Gold has averaged short-term gains up to six months following the 22 death crosses that have taken place since 1972, Detrick says. The 1.3% one-month average gain for gold following a death cross is better than the 0.9% average increase for the precious metal during any given one-month period.
Throughout two-, three- and six-month time frames, gold gains following death crosses have slightly underperformed their typical returns. The biggest divergence has taken place over a six-month time horizon, when gold has averaged a 3.2% increase following death crosses, compared to a 5.7% average gain. ...
What's more, gold has historically had a more negative reaction to so-called "golden crosses," an opposite pattern that occurs when a 50-day moving average breaks above the 200-day moving average.
Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, points out gold prices have historically held up fairly well after the notoriously bearish formation takes place.
Gold has averaged short-term gains up to six months following the 22 death crosses that have taken place since 1972, Detrick says. The 1.3% one-month average gain for gold following a death cross is better than the 0.9% average increase for the precious metal during any given one-month period.
Throughout two-, three- and six-month time frames, gold gains following death crosses have slightly underperformed their typical returns. The biggest divergence has taken place over a six-month time horizon, when gold has averaged a 3.2% increase following death crosses, compared to a 5.7% average gain. ...
What's more, gold has historically had a more negative reaction to so-called "golden crosses," an opposite pattern that occurs when a 50-day moving average breaks above the 200-day moving average.
More information can be found online at http://www.goldbullionadvisors.com
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