In your opinion, what does this blog need more of?

Friday, March 20, 2015

Where does gold go from here?


Well, there was apparently a research note out from someone who stated that, outside of exceptional secular dollar bull moves in the 80s and 90s, the usual dollar move is around 20% in a year, and we've already seen 25% in something like 6 months.

That, with the dollar chart's recent couple days of action, plus the idea that any possible pro-dollar news must already be priced into the dollar, gives weight to the suggestion that the USD move is done.

So what does that mean for gold?

Well, if there were a lot of dollar-gold pairs, people must think there's nothing left to wring out of them now, so now's the time people would want to close the trades, which means buying gold.

Then again, maybe not. So let's look at the gold ex-US chart, keeping in mind what gold ex-US actually means:


Wednesday saw a false breakdown which got reversed by Janet Yellen. Well, that's positive, but now we want to see gold move upward on that false breakdown, else this is still a touch-and-go chart. I want a large slope here, not March's crappy shallow rise.

Would you think we should be able to anticipate gold's next move by watching silver?


Well, silver ex-US doesn't look that bad at all, so far today.

It'd be nice to see gold follow that same trajectory.

As for the gold miners, well they're a leveraged short when you're long-dollar-short-gold. So maybe a lot of shorts have to be cleared out: I mean, that was one heck of a big dollar move.

We'll see. I feel stupid wanting to suggest being long gold miners today, since it's still March and the proper play is June. But I think we can agree that the gold puke we saw this month was utterly stupidated, and stupidated market conditions sometimes unstupidate.


No comments:

Post a Comment