Gold is trending fast nearing 1900 ahead of CPI print. Traders’ bullish expectations skyrocket for this year and for today’s CPI print. But the MACD indicator signals caution for the medium term. Since the 2011 top, whenever MACD and MACD’s signal difference past 20 for the weekly chart, gold fell hard. The signal is not pointing to an immediate top so when the reversal happens is the gray area. The key point of the signal is that a reversal might not be far ahead and expect a hard fall after that.
Since 2011, at the 8 times this sell signal came, it worked for all of them. The fall from the top range from %11 to %34 with an average of %18,45. Meaning if the top is to be formed today, after the CPI print, hypothetically, gold could fall to 1537 in the medium term if it falls as much of the average. But a down surprise could trigger more upside for gold and at least until the FOMC. Note that this is a weekly chart, and it could take months to determine that a top is formed.