If gold closes this week below $1820, it will make one of the strongest bearish candle formations on the weekly. Consequently, the odds of forming a Bearish Engulfing on the monthly would increase.
The last time gold formed a monthly Bearish Engulfing of that magnitude was in September 2011. The event caused a 39-month long bear market with the loss of 41% top to bottom.
Statistics on the weekly Bearish Engulfing for gold:
- Period: 1980-2020
- Occurrences: 19 (including the event in August 2020)
- Probability of decline in the following week: 89.5%
- Probability of a multi-week decline: 84.2%
- Average decline after the event: 26.1%
- Median decline after the event: 19.0%
There is not enough data for a meaningful statistical sample for the monthly on gold, but one can deduce from the weekly evidence.
It looks like I am going to write an extended weekly analysis on gold this week.
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Alert on June 15:
Alert #1 on June 1:
Alert #2 on June 3:
Alert #3 on Jun 9:
GDX Weekly Analysis:
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