Gold's bearish pattern 16 years in the making

Hans -Peter Merten | Getty Images

The Federal Reserve and powerful chart signals are forces that could send gold skidding toward $1,000 per ounce before the metal is able to stage a turnaround.

Gold futures hit a five-year low early Monday, after a trade of 5 tons of gold in Shanghai stunned the market and exaggerated already bearish moves. Traders said the seller dumped the equivalent of a fifth of last week's daily volume within minutes, and while it could have been a fund, there were no specifics.

The precious metal recovered some of its losses, but not before nearing a level watched by some as the 50 percent retracement of a move from its 1999 low to its 2011 high.

Robert Sinche, chief global strategist at Amherst Pierpont Securities, said $1,086.60 per ounce is the 50 percent retracement of the move between the Aug. 27, 1999, low of $252.50 and the Sept. 9, 2011, high of $1,920.70 per ounce. The 1999 level was a 20-year low.