Watch out for the news! 1200 numbers are about to be totally discarded. IF this scenario I'm citing ends in a break out in the upside direction as depicted, I frankly think we are not seeing 1200ish numbers for a long, time, or even for ever. If 1338 area holds, then we could see a correction: 1320 first one, 1288 second zone. Good opportunities for buying.
List of fundamentals backing this up: - T-bonds vs GOLD correlation is done, bonds are not a competitor in this wealth preservation game. - GOLD behavior has switched from currency to commodity. - Yields (rates) rising in compensation are bullish for GOLD, check history (e.g. 2003-2007) - Dollar is weak, and will continue: twin deficits are worsening, tax cut for fiscal, trade is forcing the US to devalue dollar. - Increasing inflation, rate hikes won't help but rather will follow inflation (inflation is lagging, rate hikes are lagging too). - Commodities indexes are in a breakout situation to the upside. Expect good years to come for commodities overall, gold, agriculture, oil, industrial metals, etc. - GOVERNMENT SHUTDOWN. Watch out for the news. This could add more pressure to the mix.
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Oh, and remember. Our neck line for a complete breakout to the upside for GOLD is sitting at 1360. Keep that number in mind.