Gold Bear to end with a Bang

Summary: Unless gold can close above its October high on a weekly basis, the bear market will continue – this according to Jordan Roy-Byrne of CMT. Although Jordan believed gold will eventually return to bullish territory, he doesn’t expect the bear market will end quietly. He compares the current market sentiment and readings to 1975-1976. In August of 1975, gold started a sudden decline, dropping an astounding 20% in just one month!! It rebounded some off that level, just to drop more to below its 50-day moving average. Once it reached its final low in the fall of 76 though, gold saw an impressive rally through 1980. Comparing charts from 2013 and 75-76, we see a similar pattern. Jordan’s chart shows that gold’s initial panic sell occurred in April, then another low was set in June. After hitting the $1180 level in June, gold recovered to above its first panic low, but is back down again. All told, the “bearish consolidation” in 75-76 lasted 9 months and final decline lasted 2. If we go off just the historical data, it’s possible the final low will occur sometime in the next 6 weeks. However, Jordan warns that is gold cannot close above $1350 consistently, the bear market will continue. Read more…