The price of gold could be in the middle of a major turnaround and could be heading lower, toward $1,015 per troy ounce and possibly $980, Chris Zwermann, global strategist from Zwermann Financial told CNBC Thursday.
The gold chart is showing what could be a diamond formation, which after such a long rally tends to signal some kind of a turnaround, according to Zwermann.
A diamond formation was seen in the Dow Jones Industrial Average in 2000, Zwermann points out. The Dow subsequently saw sharp declines for much for 2001 and 2002.
"So if this is a diamond, which shows a turnaround, we're going to see gold going to 1,015 (dollar per troy ounce) first of all. And if we might reach on this retracement of the last five ways up, then we see $980," Zwermann said.
A decline of that magnitude could form a large head-and-shoulders pattern in the long-term gold charts, Zwermann added.
If gold shows continued weakness it could have implications for stocks as well, he said.
- Watch the full interview with Chris Zwermann above.
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