Here's what 45 years of data on death crosses in gold can tell us about the path ahead
Gold's 50-day moving average was on the verge of crossing below its 20-day moving average, which would lead to a "death cross" on the technical charts.
Gold's stunning climb to record highs in January caught many investors off guard - as did its more than 20% plunge during the Iran war. Now, the precious metal has reached "death cross" territory.
Investors tend to keep a close eye on death crosses, which occur when an asset's short-term 50-day moving average crosses below its long-term 200-day counterpart. Their formation in markets often suggest further price declines lurk on the horizon.
A death cross in gold (GC00) could spell further trouble for the battered asset because it could "trigger trading from programmed algorithms, and lead to additional selling," said Chris Gaffney, president of World Markets at EverBank.
In other words, gold tripping that technical level could prompt prices to fall even further as some traders use the indicator as a signal to sell. However, Gaffney told MarketWatch that the latest pullback in gold might simply reflect the market reaction to the U.S.-Iran cease-fire agreement announced about two weeks ago, which trigged a drop in oil prices (CL00) (BRN00).
Gold was propelled to record highs this year by a powerful mix of individual speculators and robust central-bank buying, with one group looking to profit from the upswing in gold prices and the other looking to diversify its dollar reserve holdings. That worked until the Iran war threw a wrench in gold's momentum, with rising oil prices raising worries about inflation and expectations for Federal Reserve interest-rate hikes. Progress on ending the conflict could be another pivotal moment for gold.
"The death crossover sounds scary, but it is merely a reflection of what has been happening to gold prices over the past few months," Fawad Razaqzada, market analyst at FOREX.com, told MarketWatch.
More often than not, gold death crosses in recent years have actually led to gains for prices in the months that followed, according to analysis by Dow Jones Market Data.
Still, the last few months of losses have left gold on the verge of another death cross, its first since 2023. As of Monday's settlement, gold futures had dropped about 23% from Feb. 27, the last trading day before the start of the Iran war. Prices are trading roughly 7% lower year to date, and are on track to post a nearly 14% loss for the quarter. That would be gold's worst quarterly performance since the second quarter of 2013.
Gold's 50-day moving average was $4,474.16 an ounce on Tuesday, slightly above its 200-day moving average of $4,471.53.
When the short-term moving average moves above a long- term counterpart, some technical traders would rather sell into the rallies than buy the dips, Razaqzada at FOREX.com noted.
"This may mean increased selling pressure in the near term, but this has no impact on the longer-term direction of gold, which is driven by fundamentals," he said.
Gold's kryptonite
It's been a wild year in markets, with hot parts of the stock market SPX surging and oil prices now back down near $70 a barrel - defying even President Trump's initial expectations upon the start of the U.S.-Israel war against Iran in late February.
Yet persistent inflation, which has kept interest rates elevated, along with a stronger U.S. dollar DXY have led to lower prices for gold, said Edward Egilinsky, head of global sales, distribution and alternatives at Direxion. U.S. bonds became a more attractive "flight-to-safety" option for investors, as elevated yields offered returns that gold does not provide, he said.
The short-term 2-year Treasury yield BX:TMUBMUSD02Y was at 4.13% on Tuesday, off its recent 4.28% peak but still well above the 3.75% upper limit of the Federal Reserve's policy range. That points to the elevated risk of Fed rate hikes under new Fed Chair Kevin Warsh.
Gold on Monday was almost 25% below its record-high settlement of $5,354.80 on Jan. 29.
The Iran conflict is a "perfect paradox," said Adam Koos, president and portfolio manager at Libertas Wealth Management Group.
"Geopolitical tension should drive safe-haven buying, but when it spikes oil, it stokes inflation, which pushes the Fed to tighten - and that's gold's kryptonite," he said, referring to gold's weakness. Gold is nonyielding, so rising real rates and a stronger dollar are direct headwinds, Koos noted.
Gold through past death crosses
Death crosses can suggest losses to come for some assets - but that's not necessarily the case when it comes to gold's past performance, particularly since 2016, as the below chart shows.
Dow Jones data over the past 45 years suggest a mixed picture for gold prices following a death cross, but with the trend mostly positive three, six and 12 months later in the past decade.
Dow Jones Market Data analyzed gold's performance following death crosses for its prices since 1981.
Further analysis of the 28 death crosses for gold since January 1981 shows that the most active gold contract, one month after hitting that technical mark, has actually climbed 57% of the time. Six months later, prices were up 57% of the time, and one year later, they were up 46% of the time.
History isn't clear when it comes to suggesting what might happen next. A death cross in 2022 preceded a slide in prices, but in 2023, a death cross reversed within weeks, said Koos. The technical indicator for gold doesn't necessarily mean that a bearish trend for prices is on tap, he added.
Instead, EverBank's Gaffney thinks gold is experiencing a correction and "not the beginning of a new negative trend." This is a "good time for investors to be adding to their portfolios," he said.
"Historically high debt levels, higher inflation and continuing global uncertainty all make a good case for gold," Gaffney added.
Meanwhile, a death cross often confirms a trend that already existed, said Koos. It's like "announcing at halftime that the team is losing," he noted. "The crowd already knew."
The outlook for gold this time might actually be quite promising. Central banks are still buying at historically elevated levels, said Koos. That was key gold's climb to record highs earlier this year, and 45% of the global central-bank managers who responded to a survey conducted by the World Gold Council said they expect their own gold reserves to increase over the next year.
Yet for gold to see price moves higher, according to Koos, the Fed likely needs to pivot away from considering rate hikes, the U.S. dollar would need to soften and demand for the gold-backed SPDR Gold Shares exchange-traded GLD fund needs to return.
When those factors align, perhaps late this year or into 2027, "gold could have the legs to run," he said. For now, "it's a patience game, but not a panic game."
-Myra P. Saefong
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(END) Dow Jones Newswires
June 30, 2026 13:03 ET (17:03 GMT)
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