Bullion futures reached $1,111.70 an ounce yesterday. That lifted its 14-day relative strength index, a gauge of whether a commodity or security is overbought or oversold, above the level of 70 viewed by some investors as a signal of an impending retreat. The Dollar Index added as much as 0.3 percent today after yesterday slipping to a 15-month low.
“Gold is clearly overbought, gold is clearly over- participated in by the investing/speculating public, and gold needs a good sound thrashing to take the late-comers out of the positions and in the process restore relative health,” economist Dennis Gartman said in his Suffolk, Virginia-based Gartman Letter.
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