All joking aside, (and pictures of rockets blasting off). I keep saying ‘as we go up, keep looking down’. With that in mind, I’ve got a couple of charts here, with some simple notes on them. It’s really interesting to see the dollar trying to regain its 200 week moving average as I type. By the way, I mistakenly typed ‘dma’ the other day, when I meant ‘wma’ – apologies for that. Anyway, back to the point – if the dollar fails to retake and hold that crucial level, it will open the trapdoor, back to the 80 region, as Spock, Graddhy, and others have been saying for a while.

At the same time, gold is battling to hold above the $1300 area. Personally, I’m happier that this ‘battle’ is taking place today, rather than tomorrow. The monthly close is all important from a technical, charting perspective of course. With such quick moves, gold needs to work off some short term overbought indicators, with the dollar doing the same, but from an oversold point of view. Longer term charts all show the indicators some way to go before being overbought on gold or oversold on the dollar, as you can see below.

All we can do is let this play out. Once that triangle is in the rear view mirror, we can relax a little more. The bullish triangle in gold is much bigger than what I’ve drawn on the chart above, of course – I’ve just drawn the ‘important bit’. Once we get into the upper $1300’s and particularly the $1550 area, we can start to make some realistic assessments about how high we might get in the next few years. Once the direction of travel is fully confirmed, we can have another look at targets. My view is that we will easily make $1550, with $2500 highly likely, and then much higher targets with a low confidence level at this point So far so good. Lets see what the rest of the week brings.