Gold has triggered a sell signal based on a MACD system that has historically shown a 75% success rate since the major 2011 top. Out of eight total signals, six have worked, capturing an average downward move of 21.15%. While recent signals during the bull market have delivered more modest results, they have still successfully flagged key corrections. The latest signal appears to be working as well, though uncertainty in global markets remains high, and traders should proceed with caution.
The signal itself is simple: when the difference between the MACD and its signal line rises above 20, the likelihood of a correction increases.
While many market participants expect gold to rally during equity market crashes, history shows that in particularly sharp downturns, gold can initially follow the broader market. This is often due to rising margin calls and gold’s high liquidity, making it a common source of cash. However, this time, elevated short positions might help limit the downside risks for gold.
The signal itself is simple: when the difference between the MACD and its signal line rises above 20, the likelihood of a correction increases.
While many market participants expect gold to rally during equity market crashes, history shows that in particularly sharp downturns, gold can initially follow the broader market. This is often due to rising margin calls and gold’s high liquidity, making it a common source of cash. However, this time, elevated short positions might help limit the downside risks for gold.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.