Gold prices, already heading for the biggest monthly loss since May, may extend declines to a 13- month low, according to technical analysis by Matt McKinney at Zaner Group LLC.
The metal’s nine-day moving average has been below the 20- day average since Feb. 1, and both measures are declining on “sharp angles,” forming a so-called “super-trend down,” McKinney said. The bearish pattern signals that gold may drop to as low as $1,526 an ounce by the end of the month, he said. That would be the lowest since Dec. 29, 2011.
“There is so much momentum on the down side,” McKinney said in a telephone interview from Chicago. “The charts show that the drop is not over.”
Gold futures for April delivery rose 0.1 percent to $1,580 at 10:14 a.m. on the Comex in New York. The metal has dropped 4.9 percent in February. Earlier, the price touched $1,554.30, the lowest since June 29.
The nine-day moving average is near $1,624, and the 20-day measure is near $1,649.
In technical analysis, investors and analysts use charts of trading patterns and prices to predict changes.
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