Loading ...Gold in Loonies
This is what I consider to be a best case scenario. B has retraced 61.8% of A and could turn here. If it does, the simple 1:1 relationship targets $C1704 close to trend line resistance. Assuming further short term strength in the C$, I can see a very quick spike in gold to perhaps $US1380. This will confirm negative divergence in the sense that the commodity currencies will still have a lower high relative to their June high whereas the GDX will have a higher high. Also GDX will likely be hitting its trendline resistance then so I would be looking for a quick reversal of any spike.
Note that this is the reverse of 2015 where commodity currencies made higher lows and the GDX did not. Commodity currencies were forecasting increased miner profitability at that time.
If we close below $C1570 then this projection is unlikely to play out and below $C1550 is pretty much a confirmed miner short with the downtrend in profitability likely to continue for awhile
CDN$ is more an Oil currency than a Gold currency. Gold could easily hit $1700 CDN simply with a drop in the price of WTI and no rally of Gold in USD. It’s a true barometer of any commodities bull IMO. Since Nov 2016 the CDN$ has been swaying back and forth between the cycles of WTI and Spot Gold it’s a great way too pick up 5% or more just moving back and forth between Oil and PM’s on each side of the trade. I”M seeing the USD doing a sideways BMR for a short time at 92 Dollar Index and WTIC taking a hit back to $45. Gold holding at $1300US but rising to $1700CDN then I’m gonna sell and get back into WTI at $45US LOL. That’s my plan we will see how it plays out……
The conservative view would be a triangle formation with CDN hitting 1634 and Gold getting to $1340US
If gold holds $1300US and rises to $1700CDN then the exchange is 1.307 or a 6% devaluation. I’ve just opened a short on oil so I’m fine with this but I don’t think the CDN has topped just yet (but nearly)
So you envision a 90 on USD Index and an 1.22 CDN dollar. I don’t see Oil going down then but could happen.
Too what levels do you see Oil going to with your short?
I’m looking at a $38 target over the next two months.
That is going to be devastating to the CDN dollar I would expect 1.31 exchange in that scenario IMO. $38 is lows of Aug 16 you have this before the year is out. Gold was $1750 in Aug 16. I’ll be watching this closely. I moved out of Oil last week and moving it into PM’s on any dips’. Trading the $CAD can be a head scratcher LOL. Well we agree on the near term trend in general.
Good luck to you sir.
Thx for your thoughts.