Gold prices, in U.S. dollar terms, and stocks are both overbought and traders can expect a correction in the short to medium term, this according to Phil Streible, senior market strategist at Blue Line Futures.
“I just think it’s overvalued at this point. There’s about 311 companies out there that have recently gone into this distressed state. The bankruptcy levels are increasing. I’m quite bearish on U.S. equities,” Streible told Kitco News. “As soon as [the NASDAQ] breaks down a bit, there’s going to be a quick run to the door. I think the S&P 500 should be around 2,500.”
Gold prices should be testing the $1,666 an ounce level on the downside and if this floor is broken, the trend could become bearish.
“Gold has really stopped. If you look at that chart pattern, it got over that $1,750 on a closing basis, I thought we were going to run back up into $1,780, we just didn’t do it, we started to slide off. So if you look, it’s got this bearish pattern going on, we’ve got to break that downtrend,” he said. “I really think that gold is not going to be this great asset.”