On the weekly chart it looks like a typical cup and handle pattern forming.
Inflation is coming, there's little doubt about that. Both inflation linked and nominal bond yields are unattractive. Bitcoin is being used as an inflation hedge for those who venture into that world but many institutional investors, governments and even traditional retail investors are reluctant to go the bitcoin route which means that precious metals becomes one's inflation hedge (this excludes equities). Gold is the most notable of the precious metals.
Fundamentally gold should increase as inflation begins to spike and in the context of a low interest rate world, gold tends to be a potential strategic long term hedge.
If the dollar index starts to weaken i would also expect the price of gold to increase as people and institutions try to protect the debasement of their currency. This plays into the reflation idea.
The trading signals are also suggesting that gold has bottomed out for the time being and therefore adds credence to cup and handle pattern.
Please like and follow for daily posts on various asset classes. Please also share your views on the trading ideas and whether or not you find them to be of any value to you as a trader.
Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.
Inflation is coming, there's little doubt about that. Both inflation linked and nominal bond yields are unattractive. Bitcoin is being used as an inflation hedge for those who venture into that world but many institutional investors, governments and even traditional retail investors are reluctant to go the bitcoin route which means that precious metals becomes one's inflation hedge (this excludes equities). Gold is the most notable of the precious metals.
Fundamentally gold should increase as inflation begins to spike and in the context of a low interest rate world, gold tends to be a potential strategic long term hedge.
If the dollar index starts to weaken i would also expect the price of gold to increase as people and institutions try to protect the debasement of their currency. This plays into the reflation idea.
The trading signals are also suggesting that gold has bottomed out for the time being and therefore adds credence to cup and handle pattern.
Please like and follow for daily posts on various asset classes. Please also share your views on the trading ideas and whether or not you find them to be of any value to you as a trader.
Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.