Hey mate, that's a pretty long term chart. Holding a short in a strong uptrend and waiting for it to roll over could take a while, not ideal when paying CFD finance fees. (I've done that before). Most reversals take a while, the typical sequence if and when a bear trend develops is uptrend > sideways move and reversal pattern > downtrend. (unless black swan like covid). This could take weeks or months to play out.
Re oil correlation, it's true that oil can signal deflation which will affect everything including gold. However, apart from this fact, we can draw correlations between just about everything as everything is related to the economic cycle. It doesn't account for the unique attributes of an asset and how each will perform in certain macros.
Gold and oil are very different, one is heavily industrial, one is defacto money / wealth store. They are unique only in deflation when there's no bid for anything, but that's too simplistic and doesn't account for particluar like macros we have now, which I think explains the divergence.
There's no shortage of oil and new technologies over recent years have also pressured oil. We have insane money debasement, no competing yield from other assets, bubbled property in places like Aus and Canada, negative rates and tense trade deals, all of which is super bullish for gold judging by the trend. Although we may have deflation on the horizon, these factors are propping up gold.
Lastly, the gold trend is super strong technically. The trend is only two years young. The pullbacks have been shallow, even the covid crash didn't quite make a lower low on weekly chart. It is super strong. And concerning whether it's overpriced, it's like looking at Apple at $150, seeing all the white space under the price and thinking it must come down, but no, it cranks on to above $200. This is what gold is doing. Also of note is whether we get some economic uptick post covid (especially with central bank intervention). Looking at gold's strength now, imagine it's performance in any kind of growth period.
We may well have a move in gold as we did in early 2000's.
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