Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold's Move Higher Confounds the "Experts"
April 5, 2023 - (Gold Market Wire) - Gold's move higher has been accompanied by the usual "Death of the Dollar" prognostications, but in truth, they miss the point. The latest move higher really is very simple to understand. The arraignment of Donald J. Trump has exacted another pound of confidence from the US political system, and Gold has reacted with perfect acumen.
The Goldbugs bleat on and on about the Death of the Dollar, but when the US dollar holds, and regains its footing, and Gold doesn't budge off it's recent highs, what will they say then? Nothing, is, of course, the answer.
Gold is a confidence game and confidence is draining out of the polity of USA, not to mention much of the world. American geo-proximity to the conflict in Ukraine, however, is likely to keep the Dollar firm in relation to the Euro, Yen and Sterling. And that's about it. Gold's latest pop in price wasn't just against the Dollar. It was against all currencies. That gives it a very bullish flavour.
Technically things have panned out well. Buying against the channel bottom worked well, and we continue with the program to sell half against the channel top - as in now. Then we will look to buy that 1/3 - 1/2 back in.
Discipline means we must take some off the table... but the recent action also screams "gap up". So we'll moderate the profit take to just 1/3. We're not ready to join the throng screaming "$3,000 by this time next week!" We're going to stay with the discipline. When the time comes, and it will, we'll be looking for an explosive move from something like $2,500 to $5,000 in a matter of months... at which time we are likely to hold, say 10%-15% of the core for future posterity, ... and close the trading book for good.