Reasons for the technical correction in gold: All three major indicators point to "correction," even "significant" in magnitude?

Recently, the price of gold broke through $3500, hitting a record high and attracting the attention of global investors. However, Nomura Securities' latest research shows that three key indicators have simultaneously issued warning signals, suggesting that the gold market may be on the verge of a "technical correction," with the adjustment magnitude potentially being "quite substantial." Economic slowdown indicator: The Federal Reserve Capital Expenditure Indicator flashes a red light Nomura's team of economists has been tracking the "Composite Regional Fed Planned Capex Index" recently dropping below -4. This index consolidates survey data from various regional Feds and is weighted by economic contribution. Intuitively, when this index falls significantly into negative territory, "actual core capital goods orders" typically experience a cliff-like decline afterward, reflecting that tariff policies have substantively dragged on the real economy. Nomura stated in the report that this indicator has a very strong predictive ability - in the past 6 triggers, 5 have successfully predicted economic recessions. Additionally, the Russell index (representing economically sensitive/cyclical industries) typically shows extremely negative trends in the next 3 months, while the 10-year bond yield first rises in the following 2 weeks to 1 month before turning downwards. More directly related, when this index falls below -4, gold's performance in the following 2 months is often poor. Nomura believes that this index is expected to further decline to -6 in April, strengthening the credibility of the warning signal. Abnormal capital flows: Market enthusiasm cools sharply after overheating The second warning signal comes from capital flows. Nomura observes a historic anomaly of "excessive enthusiasm for gold" in the current market: data shows that GLD experienced capital inflows in excess of the historical 95th percentile over two weeks, followed by single-day outflows exceeding the historical 95th percentile. Nomura's analysis suggests that this reflects the "latecomers/weak holders" starting to unwind positions, possibly triggering a larger sell-off. Nomura's data shows that this "large in, large out" pattern has occurred 9 times in history, with the previous 8 almost accurately predicting a gold retracement, with the worst performance typically concentrated in the next 2 months. Here, we supplement with specific data - this morning's news also mentioned that earlier this week, investors withdrew $1.27 billion from the SPDR Gold ETF, marking the largest single-day outflow since 2011, just as the gold price hit a record high above $3500. It is worth noting that in 2011, a similar outflow of funds coincided with the last super-cycle peak in gold, after which gold entered a long period of consolidation until breaking out in 2020. This historical context provides some reference significance for the current market. Technical indicators: Gold price deviates significantly from the long-term moving average The third warning is based on technical analysis. Last weekend, the trading price of gold was more than 25% above the 200-day moving average, reaching a level that Nomura described as "pretty absurd." Such a significant deviation from the long-term trend line often signals a market correction is needed. Nomura's historical data analysis shows that whenever the gold price deviates so significantly from the 200-day average, the price tends to experience a noticeable retracement in the next 2 months. This article is sourced from "Wall Street See News," written by Gao Zhimou, edited by GMTEight Editor: Chen Qiuda.