Gold: World Currency Or Ultimate Asset

The world’s greatest asset is on sale. In China, India, and the Western gold community, shoppers are happily placing small amounts of “golden groceries” into their shopping carts each week, and enjoying the price sale.

Double-click to enlarge this gold chart. 

From a technical perspective, this chart is magnificent. The left shouldering process took about eighteen months, and the right shouldering process has just reached the same eighteen months of time.

The pattern itself is an inverse head & shoulders bull continuation pattern. From a price perspective, perfect symmetry would be created if gold traded at $1180 during the next few months, before surging above the $1400 neckline area and up towards the $1750 target zone.

Double-click to enlarge this short-term gold chart.

Gold may trade down to the “perfect symmetry” zone of $1180. It could also begin to rally from the current $1250 - $1225 modest support zone. What happens next will be determined mainly by market fundamentals.

Jay Powell seems determined to push ahead with balance sheet contraction via QT, rate hikes, and he may widen the Fed funds/excess reserves spread further. 

That’s negative for the ability of the US government to finance itself, positive for money velocity and positive for gold.

Double-click to enlarge this dollar versus rupee chart. 

The bottom line is that the current gold price sale is a very mundane love trade-oriented affair.

That’s because the dollar’s strength against the rupee during gold’s weak demand season has resulted in a very modest price sale for gold priced in rupees.

The good news: A bear wedge has appeared on the dollar-rupee chart just as gold arrives at $1250 -$1225 support and seasonal love trade demand begins to strengthen. 

This is essentially a mandate for all gold market shoppers to buy this price sale, and buy it with a smile.

I’ve suggested the US stock market is somewhere between the seventh and ninth innings of its ballgame, and clearly, top money managers at Guggenheim agree.

1 2
View single page >> |

Special Offer For Website Readers: Please send me an Email to [email protected] and ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.