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The AUD chart is troubling. You might remember my chart from a few days ago – the dollar rising to back-test from below…
If the dollar resumes its downtrend after this test (which it will need to do soon), it means the AUD and AUD/USD pair will resolve to the upside. Here’s another chart of AUD/USD. It’s the daily, linear chart, which puts a slightly different slant on things.
The downside space on this chart, just about matches the upside limitations we have on the dollar. If they breach, we’re screwed.
For gold, it isn’t all just about the US dollar Northstar. Check the correlations between the Euro and gold over time and the Yen and gold over time
and see what you come up with.
ahem
https://www.macrobusiness.com.au/wp-content/uploads/2018/04/7u4.gif
https://www.mcoscillator.com/learning_center/weekly_chart/deficits_and_gold/
Cross-asset correlations are incredibly complex. I know it’s about much more than the dollar, but I think this is an important testing point, with the dollar at a very important level. Ultimately gold will appreciate of time when measured against ANY fiat currency. It’s all a question of the relative speed of each currencies ‘devaluation’.
I see gold falling to the low $1100’s, rallying back up to between $1550 and $1850, then falling back down to $550 – $600 in the next Great Financial Crisis.
*Then* I see the second great gold bull market commence.
This outlook is obviously subject to change over time.
Thanks JL. Depressing, but I’ll acknowledge that as a possibility.