Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold Grinds Lower
August 29, 2022 - (Gold Market Wire) - In our last Gold missive, some ten days ago, we noted that the outlook was poor for Gold. We reminded the trading world, "make no mistake, the technical picture is weak. ... If $1760 falls we have some more support at $1750 and then a grind lower." That is pretty much what we have gotten.
Now we have to deal with the $1700 level. If we press through that, the "proper thrashing" we talked about earlier may start to materialise.
There is little Gold can do right now, in face of one of the most epic US Dollar rallies of the past century. This is historic stuff. The Euro, flagship project of the EU, is lying at death's door-step (under 1.00), and looks ready to take on the all-time lows. Sterling, now under $1.17 looks ready to flirt with parity before long.
Make no doubt - the monetary system is coming unglued. The US Dollar is going to inflict maximum pain. It's going nowhere but higher, and Gold is going to work lower on the back of its phenomenal strength.
But Gold bulls should take heart. At these USDX and EUR/USD levels, Gold should be falling out of bed completely... Instead we have:
A flushing as we fall under $1700 is a distinct possibility, and make no doubt, if we get the rout, we will be looking to establish length. The Bull in Gold is not dead, yet.... it's just that the US Dollar and Crude Oil have it in the "pen". We may not get our of it for several months, but we are probably looking at one more big rally to new highs before the market is put on ice for a long time, or is fundamentally altered in some way (more likely).
Our thesis has always been that Gold and the Dollar can rise together. And as the chart above shows - that's pretty much what we have...even if Gold expressed in USD hasn't done a moonshot... yet.