Gold Has Been This Overbought Only Three Times in Two Decades
Photographer: Dario Pignatelli/Bloomberg
This article is for subscribers only.
Gold is almost guaranteed to record losses in the next two weeks, if history is any guide.
The 14-day Relative Strength Index for the yellow metal soared to 86 on Monday, well above the level of 70 that typically suggests securities are overbought. Previously, there have been only three times since 2000 when the RSI rose above 85, and in each instance bullion fell over the next 10 trading days. The loss averaged 1% compared with a gain of 7% over the previous 10 session.