Gold is building a bear flag which indicates further pressure to the downside should be expected. The fact July and August are the weakest months for gold from a seasonality perspective is corroborating the short term bearish technical picture.

Up-to-date Gold Price chart on my public list.

Further evidence of potential price weakness ahead in the precious metals sector is what now looks like topping tails in the HUI – Gold Bugs Index. Check the following Chart comparing the price of Gold with the HUI.

Although the recent Moving Average Death Cross in the S&P 500 Index wasn’t a trading signal in and by itself, the implications are bearish. We now have a cluster of moving averages that represents serious overhead resistance.

Conclusion:

So far this has to be considered a bounce from deeply oversold levels. For position traders there is still no compelling reason to go long. The strong charts still need to set up and build more pattern pressure in order to go long for position traders. Markets are headed into resistance. A good time to take advantage of being in cash and enjoy the summer.