Loading ...Gold Is Waiting For Dollar Confirmation
First off, two simple charts. Gold and the Dollar…
Both are still on pause, staring at each other, waiting to see who blinks first…
It’s my view that the dollar will prove the weaker of the two at this point in time, and gold will benefit. Here’s why…
And a final bonus chart which includes the all important cycle which drives the pattern above, along with red zones to show the times in the past when gold peaked and where the next gold high fits in…
FWIW NS, I believe we are ending a ‘Simple Flat’in the Gold market with regard to it’s correction.
From a Chartology point of view, it is a lovely looking continuation Bull Flag, looking for some symettery at the bottom rail in the coming week or so.
From and EW POV, like I said earlier, a simple flat. Which runs 3-3-5. 3 down to the end of the A at the start of March. The next 3 up is tougher but can see the spike high two weeks ago as the end of the B. Which means 5 waves down, to end this ‘correction’. As such we should be in wave 3 down of that this coming week. Dont expect much downside below 1300, maybe intraday to 1295 thats it – MAX.
From a cycles POV, I see the bottom in March as a DCL. If so, then we can construct the cycle trendline from December to that and onward. We have been gaining and losing it for a while, similar to the IC decline into the December low. As such I see maybe a week or so of weakness to come, a new low for the ICL, then we should be fine!
FYI: Commericals added to shorts this past week, I think they are thinking the same, lots of them have loaded up already, but in anticipation of a bit of weakness, they have sold into the strength presented.
For the Dollar, I expect a backtest of your blue line to correspond. Then we can start Wave 3 of 3 up!
Great commentary Waz. Thanks for your insights.
Thank you NS, great charts. The bottom two you posted look eerily similar (at least in pattern but may be time shifted) to the Short term Fed Funds rate (crisis line ceiling – point at which crisis causes fed to drop rates drastically since early ’80’s). I’ll also compare against the regular unemployment cycles (rearward looking I know). A lot of people believe the business cycle has been killed off by the Fed – we shall see.
Thanks YYZ. There may be some distortions, but in my view, the business cycles are alive and well. We’ll find out soon I guess.