Gold’s short-term trend is overbought. Is it time for a correction? Analyst’s latest chart analysis

Spot gold came under slight pressure in Asia on Tuesday, trading just above 1,560 after falling from a high above 1,580 to a near seven-year high as the U.S. killing of a senior Iranian commander raised fears of a widening conflict in the Middle East.

AG Thorson wrote a brief analysis of what’s next for gold:

Gold surged to a new high after confirming a recent six-month low. Prices have gone up by more than $100 since Christmas. The short-term trend is overbought and there should be a pullback.

As I explained earlier, gold prices fall to mid-range lows every six months.

The last cycle peaked at September and prices entered a lengthy cyclical correction. The stock rose above $1,492 on Christmas Eve, confirming a six-month low in November, and another rally is in the works.

Compared with gold, silver usually has a slow start but a strong finish.

If you feel you’ve missed gold and miners’ six-month lows, consider silver, which is just getting started.

If there is a breather, a small correction is likely. I think the support is between $17.40 and $17.70.

Overall, precious metals and mining stocks are breaking six-month lows. It never goes straight up, so expect a pullback somewhere.

The six-month cycle should last until February or march before reversing to the next intermediate low.

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