Gold may be all set to lose its glitter as the traditional safe haven asset. The chart depicted above traces the price of gold in the past 1000 days. Clearly there has occurred a reversal pattern with price action breaching and staying below trendline. So long as it remains below $850, gold could see pressure towards $600.
Falling gold could perhaps sound absurd in an environment of geo-political risk looming large and returns on virtually every other asset class proving negative. But that’s precisely what the charts are saying and it would be interesting to see in the next few months whether the forecasts as per charting analysis stand vindicated….
Possibly, given that a trend reversal is in place, it may mean that the spectrum of deflation may take centre stage, meaning depression in the United States and gold which is seen as a hedge against inflation will quite naturally have to lose its shine!
