Gold bounced recently while the U.S. stock market tanked.

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Last Thursday was the first time in almost 6 months in which gold’s 14 daily RSI (momentum indicator) exceeded 55.

This is rare (historically). Gold doesn’t usually remain in such a strong downtrend for so long.

Here’s what happens next to gold (historically) when its 14 daily RSI exceeds 55 for the first time in 5 months.

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As you can see, the sample size is very limited. Let’s relax the study’s parameters.

Here’s what happens next to gold (historically) when its 14 daily RSI exceeds 55 for the first time in at least 3 months.

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Conclusion

As you can see, gold usually continues to bounce a little more in the short-term. However, don’t be a long-term gold bull (2 years later, gold was up only 33% of the time). This is because such long downtrends are characteristic of gold and silver bear markets.