Because of the strength in the price of gold recently, the technical indicator MACD has finally turned to a buy signal in the weekly chart for first time since the bear market started back in 2011 when this indicator gave a sell signal. Why does this matter? From a historical perspective it’s very interesting since last time it happened from such oversold levels, gold rallied 70 percent in just three months. See long term chart with MACD here:
As you can see in this chart, when MACD turned to a buy signal back in 1982, gold surged from $300/oz to over $500/oz in a very short time frame, about 70 percent. A stunning move to say the least. Today, a similair move would take gold to $2000 in the coming months.
The MACD-indicator is now significantly lower than it was in 1982, perhaps, if history repeats, we will see something similair today. This is only based on historical patterns and nothing else so take it for what it’s worth. It should be considered as a possible scenario for the price of gold. Here is a zoomed in version so that you can see the buy signal more clearly: