Updates on GOLD and the Dollar 8/5/14
The US Dollar has had a powerful relative rally from late June into early August. This has put pressure on GOLD. See the US Dollar chart below: (More notes under the chart)
So this has led partially to the fall-off in Gold from 1346 to 1281 recent dip lows. Interesting that at $1281 we have a perfect 61% fibonacci retracement of the prior $106 rally from 1240-1346. We would like to see 1281 area hold for a new rally, and right now the US dollar is overbought as well. The counter balancing issue though is the Commitment of Traders report is showing the smart money commercial traders with very large short (Hedged) positions in GOLD… that is creating uncertainty for traders as well.
Otherwise, on a longer term basis the Stage one base continues over 13 months to build possible power for a big rally this fall. The next level of support comes in around $1263…. keep a close eye on that as key to hold…. 1281 is the 61% support
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