GOLD: Is the Gold Rush Over?
Gold, amongst other commodities, has taken a beating this week off the back of a surging US Dollar. We can quite clearly see the head and shoulder bearish reversal on the 4-hour time frame played out resulting in the sharp decline towards psychological support area 1200.00. This level along with the 2008 trend line I continue to mention has been very reactive so it will be interesting to see how price behaves in this area. With both Gold and the DXY fast approaching their respective immediate support and resistance areas it is unlikely to see Gold sustain a break below 1200.00 without the Dollar smashing through 97.86.
The US Dollar may be soaring for the time being but this strength most definitely isn't sustainable for the long term. Deficit spending will at some point drive inflation higher and this will be reflected in commodity prices.
The Government can continue printing Fiat currency for a while but at some point, there will be a shock to the system and investors will turn to Gold and Silver as safe haven assets.
To conclude, exercise patience this week as Gold and DXY approach very reactive zones, my personal opinion is for the short term at least for these levels to be respected. However should we see another surge of Dollar strength and a strong break below 1200.00 for gold, we will be looking to fall to 1180.00.
Written by Sam Moore (Find me on Instagram: @Moore_FX)...