Gold prices got a bid on Tuesday as the dollar rally softened and geopolitical unrest had investors scrambling for safety. But according to one top technician, the boost is nothing more than a dead cat bounce.
"I think there's significant downside from current levels in gold and its benchmark ETF, the GLD," Rich Ross said Tuesday on CNBC's "Trading Nation." Gold has come under fire in recent years as the U.S. dollar index has rallied significantly. Gold is down more than 9 percent alone in 2015, and tracking for its longest back-to-back yearly losing streak since 1998.
Looking at a long-term chart of the GLD, Ross noted that just before its massive decline, the ETF put in a double-top formation. Technicians often view these patterns as confirmation of reversal in trend. "This bearish multiyear double top and lower high ultimately marked the peak in gold prices," Evercore ISI's head of technical analysis said. "Clearly we are down significantly from there."