Reason #1: Gold reached $3000/oz and it has a strong tendency to pullback after reaching $1000 multiples for the first time as can be seen on the chart, specifically when it first reached $1000 and $2000. $1900 which is a whole number in the ballpark of $2000 was also stiff resistance in 2011.
Reason #2: Gold has been above the 52-week simple moving average for over 1 year. This alone is not reason enough to go short, as gold can stay above the 52-week average for 3 years like it did starting in 2008, but it is indicative of gold having rallied for an extended period of time without having any routine pullbacks. In the absence of routine pullbacks, gold can be said to be "past due" for a pullback the same way a person can be said to be "past due" for a dental appointment. A person being past due for a dental appointment isn't necessarily going to go to the dentist any time soon, but they will have to go eventually and the longer they put it off, the more cavities they'll have to have filled and possibly root canals once they do. This "number of days above moving average" metric is plotted at the bottom of the chart.
Reason #3: Gold tends to correct during stock market crashes. If the stock market keeps crashing, gold will likely follow, as it more often than not does.
Reason #4: Precious metals and industrial metals have dropped tremendously with the "Liberation Day" and retaliatory tariff announcements. Gold has been holding up like a champ in comparison. If other metals are rallying, it might not be a great time to short gold, but if they continue dumping or hold steady at or near current levels, gold may very well follow suit due to being in the same commodity family. Not a great reason, but a reason.
Reason #5: Gold is extended. Draw any trendline, look at any indicator, gold is flying high. This is similar to reason #2 but is less specific.
One might consider looking to catch downswings, particularly when price is below 3000. Gold is long-term bullish, but poised for downside price action in the near term.
Previous peak to troth moves with similar setups:
May 2006: -25.76% over 5 weeks
Mar 2008: -18.15% over 6 weeks
Sep 2011: -20.19% over 3 weeks
Aug 2020: -14.97% over 17 weeks
Current move: -4.8% over 1 week
2700 (-14.88%) before first week of August 2025 is a comparable move to the Aug 2020 move.
2530 (-20.12%) by April 25th 2025 is a comparable move to the Sep 2011 move.
Reason #2: Gold has been above the 52-week simple moving average for over 1 year. This alone is not reason enough to go short, as gold can stay above the 52-week average for 3 years like it did starting in 2008, but it is indicative of gold having rallied for an extended period of time without having any routine pullbacks. In the absence of routine pullbacks, gold can be said to be "past due" for a pullback the same way a person can be said to be "past due" for a dental appointment. A person being past due for a dental appointment isn't necessarily going to go to the dentist any time soon, but they will have to go eventually and the longer they put it off, the more cavities they'll have to have filled and possibly root canals once they do. This "number of days above moving average" metric is plotted at the bottom of the chart.
Reason #3: Gold tends to correct during stock market crashes. If the stock market keeps crashing, gold will likely follow, as it more often than not does.
Reason #4: Precious metals and industrial metals have dropped tremendously with the "Liberation Day" and retaliatory tariff announcements. Gold has been holding up like a champ in comparison. If other metals are rallying, it might not be a great time to short gold, but if they continue dumping or hold steady at or near current levels, gold may very well follow suit due to being in the same commodity family. Not a great reason, but a reason.
Reason #5: Gold is extended. Draw any trendline, look at any indicator, gold is flying high. This is similar to reason #2 but is less specific.
One might consider looking to catch downswings, particularly when price is below 3000. Gold is long-term bullish, but poised for downside price action in the near term.
Previous peak to troth moves with similar setups:
May 2006: -25.76% over 5 weeks
Mar 2008: -18.15% over 6 weeks
Sep 2011: -20.19% over 3 weeks
Aug 2020: -14.97% over 17 weeks
Current move: -4.8% over 1 week
2700 (-14.88%) before first week of August 2025 is a comparable move to the Aug 2020 move.
2530 (-20.12%) by April 25th 2025 is a comparable move to the Sep 2011 move.
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.
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.