Gold's Next Stop: $1,300
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For the last couple of weeks, we have written about the struggles of gold and thought our read was wrong when gold popped to $1,365 before failing. Tuesday showed more of that failure; equities melted down, as did gold. There is a lot of pressure on gold and that only figures to get worse as it approaches $1,300.
After three days of rallying, equities found themselves under pressure and the question is what does Tuesday's sell-off mean? The answer is simple. If there is follow-through to the downside, the tops are in, and if they rally, new highs are on the way.
We believe the black-swan event is the Fed and its clueless monetary policy. The Fed is losing control of the bond market and shortly will lose its last ace, which is the weaker dollar. The dollar looks ready to explode, which should keep the pressure on gold. Next stop: $1,300
Keep those stops tight.