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Declines in Gold Prices Are Not Over Yet

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The bottom in gold appears to be a few weeks away, which gives the market plenty of time to move lower.

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Let us move on to the chart of the yellow metal from the non-USD perspective.



Here, gold prices are not at the 50% retracement level but rather are lower. Other than that, this chart is similar to the previous gold charts and it seems that the short-term trend here will continue to the downside.

Finally, let's have a look at the Dow (INDEXDJX:.DJI) to gold ratio chart.



This chart suggests that we will see lower gold prices. The reason for this is that the declining resistance line for the ratio has not been reached.

Summing up, the strength in the physical market suggests that the bull market is intact and that what we're seeing now is just a major correction within the secular bull market. However, it seems that declines in gold prices are not over yet. The bottom appears likely to be a few weeks away and this gives the market plenty of time to move lower. Gold corrected 50% of its decline and could now move lower once again. The Dow to gold ratio indicates a strong resistance line has not yet been reached. This supports the premise that gold's final bottom is not yet in.

For the full version of this essay and more, visit Sunshine Profits' website.

Twitter: @SunshineProfits
No positions in stocks mentioned.
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