I said yesterday that the Dollar will resolve this move to the downside, and I’m going to stand by that. I’m not saying it’s impossible for a big Dollar breakout to occur, just that I don’t think it will happen. It’s just my view, but I can back it up with some reasoned thinking. First and foremost, in the background you have the supercycles. We are in the upward portion of golds 16 year cycle and the downward portion of the Dollars. That’s not enough though. We’re fast approaching a major inflexion point. I said recently it’s ’98 or bust’ for the dollar, and we have now pushed through that. Interestingly gold doesn’t seem to be paying attention. I am though. I’m watching all of the downside support levels that I’ve mentioned over recent weeks. I use goldprice.org for my charting and the default moving average is labelled as MA(9). That means 9 ‘periods’. On a monthly chart, that’s 9 months, but each month is just over 20 trading days, so it’s more or less the 200 day moving average. The MA, 0.236 Fib retracement (taking the 2016 top as the ‘1’ level and $1050 as the ‘zero’ level), and curved base ALL converge in the same area. One support is important, but 2, 3 or more make it hugely important. We may or may not test the $1250 area (I think we need to). We have $1220 as ‘final support’ for any spike lows. FOMC may well be the trigger. It’s going to scare the hell out of me if/when it happens though. Here’s my gold chart which says it all really…

The Dollar is attempting a hugely important breakout (see UUP chart below). I believe it will fail, and drop hard. I have to credit Dave Farber on Twitter for alerting me to this bearish rising wedge. It pushes up into the resistance zone just as gold is testing the support levels above. The next few days/weeks are not for the faint-hearted.