Gold has broken it’s bull market uptrend…

The chartology is terrible. However you cut it, the failure of a long term support line is not a good sign. BUT, after looking at it more closely, is it as bad as it appears ? Indicators can help, and understanding the cyclical nature of markets also helps. We’ve seen false breakdowns many times, and you have to have them to destroy sentiment and exhaust selling. That’s what sets up the most powerful rallies. Let’s see if we’re likely to be getting to that stage by studying the WM%R indicator…

So we’re just about as oversold as it’s possible to get. Interesting. How about the cyclical nature of the gold market ?

The dollar’s inverse correlation to gold price is often pretty strong. Let’s see if the indicators can give us a clue there…

So the dollar is overbought. Another clue maybe ? I know it can remain overbought for a long time and result in a huge rally like it did in 2014. The down-trending peaks in the WM%R might be hinting at an imminent turn though. Each peak is lower than the last. The dollar has it’s own, very reliable cycle of course. Perhaps if we know where we are there, that could give us some more clues as to which way this will ultimately resolve…

So the timeframe for the dollar top is behind us, and the cyclical dollar low is ahead of us, pulling price down like a magnet over the coming months/years. I rest my case for golds defence.