Gold has gotten hammered like a "Whack-a-Mole" ever since Vladimir Putin successfully annexed Crimea, redrawing the region's borders out of the Ukraine and into Russia.
The metal's price has waterfalled lower all week after the USA and European Union put "weak" sanctions on a number of individuals in Russia and Ukraine. Even the Ukrainians are withdrawing from Crimea.
Steeping aside from the investment side for a moment, short-term, avoiding a more difficult, non-combat confrontation with ex-KGB Putin might be good for stock prices in the short-term, but not honoring commitments will hurt American interests in the long run. Any parent knows, consequence free misbehavior is followed by more of the same, and encourages others to act out of line as well – hope we are wrong, but we doubt this is the last power/land grab we'll see.
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[Related -SPDR Gold Trust (ETF) (GLD): What Will Move Gold As Ukraine Crisis Eases?]
Back to atomic Number 79; iStock thought a 3-T review of gold might be timely as many investors might be wondering if the recent vertical drop is a buying opportunity or if it is best to stand on the sidelines.
On the first chart, we see the yellow metal running into support levels, which should help the price firms and curtail the straight down action we've seen lately. However, that doesn't mean the price can't go lower. If $1,325ish folds and lets gold go lower, then we'd expect to see #79 hit its 50-day moving-average of $1,300.
[Related -SPDR Gold Trust (ETF) (GLD): Is It Time To Buy Gold?]
Any break to $1,300 would be short-lives in our view. As you can see on chart number 2 below, the 50-day mark would put gold's price three standard-deviations below its normal trading range. It's not a condition with a long shelf-life.
With momentum, as defined by rate-of-change (ROC), cliff-diving with the price and volume accelerating, it looks as if there is legroom for gold to go lower in the immediate future; so, any immediate bounce may not have much longevity.
Overall: iStock thinks there is about a 75% chance gold tests its 50-day moving average in the days ahead. If/when the metal flirts with $1,300 intra-day, it could prove to be where the metal pivots higher. If $1,300 doesn't hold, a solid bed of resistance is right below from $1,275 to $1,250. However, to get that low in the near-term would require something highly unusual, in our opinion.
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