Gold made a brief attempt at rallying amid global market turmoil. But as the metal falters in its gains, one technician says the bounce in gold has already run it's course, and is about to head lower.
""If you have any profits on this counter-trend move, I would take them and you can sell gold, as this downtrend has resumed in earnest,"
Gold gained almost 4 percent in three trading sessions last week, in a volatile selloff spurred by trouble in China's markets and the prospect of a rate hike. However, gold is back on the decline this week, losing almost 2 percent on Wednesday.
According to Ross, one troubling signal is that the metal has been unable to break above its 100-day moving average.
"The inability to get back above that 100 day is a key failure that's left gold vulnerable to further decline," he said.
Ross said the next support level will come in at $1,120. If gold breaks below that, it could be headed back down to levels reached in early August of $1,100.
Also contributing to the fall is a decrease in volatility as the market attempts to come back from the week's losses, Ross said.
"Gold does well when the dollar is weak and fear is high. We've recently seen volatility come off, fear has subsided and dollar has firmed," Ross said. "All of which provides headwinds for gold and reinforces this key failure in the downtrend."