Nothing much to report, as gold remains in a tight consolidation in the Flagpole & Flag since Jan. 25.
It is a tight and positive pattern.
We still have this Inverse Head & Shoulders with the Golden Neckline in the 1350-60 area .
The pattern of focus is still the Flagpole & Flag.
We still have to check:
1- the circus in Washington with tariffs for China's...
Looking at the "Big Picture":
1- Political Circus in Washington with increasing Debt that will never be paid.
2- Geo-Political risk in Syria, South China Sea, Ukraine, North Korea ...
3- De-Dollarization process (How did you go bankrupt?" Two ways. Gradually, then suddenly )
IF Petro-Yuan supplants Petro-Dollar
then Importing Nations No longer need Dollars ...
Let's see IF DXY will hit the top of my red channel as a target (~90.20) .
Actually 90.13 is a Fib. retrac. of 78.6%.
The 10Y is still falling and the yield curve flattening.
I don’t see any possibility of a sustainable rally until DXY hits at least 87.50 or 86.
It's important to watch how gold outperforms between two obvious assets like Bonds and Stocks.
Using GLD and two most liquid ETFs to represent each asset class TLT and SPY.
IF Gold is in an uptrend, it is going to be outperforming its alternatives. I think that’s exactly what’s happening here.
We still want to be long Gold if we’re above 1300. That hasn’t...
We all know the Bearish case … Let’ s look at the Bullish case just for a change.
IF this pullback is not over, this correction can be a simple zig-zag (w-x-y).
It is possible to have a double zig-zag (w-x-y-x-z) but in that case we will simply go down further
before reversing to test the neckline.
Invalidation of this count at 1238.
Gold has made a series of higher lows since bottoming
at $1045 in December 2015
Gold has consistently run into resistance above $1360,
while pullbacks have found bottoms at higher levels
The most recent December low at $1238
now takes on added importance as a
downside support level
Those are the facts.
All the other stuff you are reading
is mostly made-up mumbo jumbo
This past week confirms the following that you have to respect the impossible Trinity.
You can have a positive stock market & attract foreigners with rising bond yields, but not with a rising USD.
The new Bear Market in Bonds with rising yields will be very positive for gold.
Looking at the ratio of TLT / GLD as a proxy for gold
and the rising 10 year yields...
There is clearly a back-test going on right now, of the “Neckline” of a bullish inverted Head & Shoulders pattern.
The pattern may be slanted but is still valid.
We can observe how the Neckline served as “resistance”, consistently rejecting price (red arrows) until August, after breaking out to the upside.
To confirm the upside breakout, and potential upside...
This potential H&S bottom is 4 years in the making and is big enough to lead the next leg of gold’s bull market much higher if the neckline is broken to the upside.
Currently the neckline comes in around the 1350 area.
Also interesting to note the CRB Commodity Index Breakout on the Daily :
It looks like we reached the target for the Cup and Handle at 1357 few days ago.
Looking at the structure, we have nice Fib. relations:
If the Handle was wave 2, we have a Fib. target that was met for wave 3 at 1357 (1.618 ext.) . Exactly the same target of the Cup and Handle...
Actually the retrace for wave 4 reached 61.8%. So it is very possible that wave 4...