Loading ...Gold Fibo retracement…
Gold hit its 38.2% Fibanoacci retracement of the entire bull run around $1690.
Very very cautiously optimistic gold has found a low, but I still think silver will tag at least its 200 dma before this is over. That could come on a double bottom for gold.
Then again, whose to say gold doesn’t go lower in time. At this point it is just a guessing game.
The Yen is crashing currently and is even more oversold than yesterday, but the Yen has a habit of extreme moves that defy technical indicators. Maybe it’s close to a bottom too.
The central banks may be repeating their Yen carry trade 2.0. In 2011 they shorted the Yen at 77 and used the credit to short gold at $1923 to end the bull market in gold. It appears they are doing it again but this time I believe they are using the credit to buy the dollar.
Trust me, the thought has definitely crossed my mind.
I recall back sometime in 2012-13, the Fed announced QE3. I thought gold was headed to the moon, surely. Literally the day after the Fed announcement of QE3, gold started tanking. Turns out the BOJ announced a QE program that dwarfed the Fed’s. The rest is history.
So the global CBs were able to print trillions, while commodities went to 50+ year lows and gold and silver were pummeled. I would say masterclass by the Fed.
It goes to show you that this is a story of currency flows just as much if not more than the absolute quantity of currency.
Maybe the Fed is about to pull off another masterclass, just as all the goldbugs (myself included) scream that the fundamentals couldn’t be stronger, just like in 2013.