Gold Market Wire
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The Warning in Gold's Chart
December 2, 2021 - (Gold Market Wire) - Gold's struggle for reversal yesterday never got fully airborne, and now the market has re-affirmed weakness out of Asia, overnight. It's not a good sign for the Bulls.
What should have been a base for optimism, now looks like failure. The power downtrend is still holding the market.
We're running out of time to regain the trend line, and the market looks vulnerable. Of course, at the center of this weakness is US Dollar strength. As we have maintained, the real trade is long US Dollar vs. Euro, established at 1.225 and a more recently established long USD vs. GBP. Of course, with the deterioration of the situation in S.E. Asia, this can include the antipodean currencies as well. The chart is ominous, to say the least, and Gold is reading it closely.
Gold, as we are wont to say, has actually held up well, considering the above chart. But the pressure is building, and length in Gold should be extinguished unless a dramatic move up happens - and soon! The Goldbugs are about to get another lesson that their hatred of the US Dollar has been so unflinching a mantra, that the market is going to clean their clock once again. The US Dollar is simply roaring - and it doesn't look like its ready to quit anytime soon. As we can see for the chart, we have recently accelerated the downtrend. (Note to Goldbugs: Religious devotion has no place in the markets, which are atheistic in nature.)
Nimbleness in trading the Metals is still the order of the day, and right now that means the sidelines. To repeat, the underlying strength of the Metals is evident. Just compare the two charts from August to November. A simple glance will tell you how strong the metals actually are. Gold has rallied alongside the Dollar meting out serious punishment. That is the real story of the metals, and we ignore it at our peril. We have already seen the true counter to those who believe the "inverse monetary proxy" thesis. The thesis is dead.
Bottom Line: The Dollar looks as strong as ever. And Gold is acting with strength too. Right now, Gold could take another lurch down, so we stand aside. But we will be looking to establish length again before long. The die has been cast in the market some time ago, and especially over the past four months. The USD Dollar is not "finished".
And neither is Gold.