The price of gold is currently trading more than 4.5 standard deviations below its 50-day moving average, which clocks in at the most oversold reading since at least 1975. The chart below shows the daily overbought/oversold reading for gold based on the number of standard deviations it traded above or below its 50-day moving average. As shown, there have not been very many occurrences where the commodity traded more than 3.5 standard deviations below its 50-day moving average. In fact, there have only been ten.
Earlier today, we sent out a report to Bespoke Premium clients highlighting how gold and the S&P 500 performed in the past following each of these periods. Interestingly, there were some clear trends for each asset. Clients wishing to view this morning's report can click on the link below. If you are not yet a Bespoke Premium client, sign up today!