Gold short (sell at highs)

This is an update on my 22 April idea when I publish short gold and neutral silver . I had shorted gold and also bought silver at that stage and made a healthy profit on the gap post french election.

Gold is getting very hard to predict now. The correlating currency to XAU is UJ and UJ has been quite bullish despite weaker US economic data. The DXY is also been held at respectable low levels by both GU and EU bulls buoyed by UK snap election hype and expectations that Macron will continue on to win the final round of the French elections.

This chart quite astounds me as the gold/silver ratio is skyrocketing moving well above the 200ma and you can see the divergence in gold and silver prices.

The fact that the DXY is resisting weaker data is pointing to a strong underlying demand for the currency and with US companies well into Q1 reporting season I would expect some asset manager inflows back into the US economy. Thus my outlook for gold is bearish and I would expect that gold would go down close the gap on silver as opposed to the alternative.

Gold is currently ranging at resistance levels and presents good short term trading opportunities selling off inter day highs and should the market move against you hedge into the trade by buying silver .

I don't expect the markets to shift drastically this week as EU bulls are holding on to their trades and would expect to off-load that at even higher profits after the french elections. The impact would be the corrective boost that the DXY is expecting.