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Gold bulls hold the line before impending rate hike

Commentaries & Views

The SPY looks to be on the brink of finally closing the remaining downside gap we have been highlighting since we proposed stocks had topped again (for the medium term) in mid-august, at major resistance.

Gold bulls continue to hang on to $1650 - 75 in the face of an ever-rising and resilient DXY; note that the negative divergence between price and RSI in the DXY remains well intact.

At the same time, the gold to silver ratio looks like it could be forming a top on the monthly timeframe around Fibonacci resistance.

Of course, with the impending FOMC meeting Wednesday, it remains to be seen whether Jerome Powell will provide the market with "reason" to send the DXY up to tag the upper resistance line shown in the chart above at around 115. Should that occur, it would put price action in the DXY in near parabolic territory, which to a contrarian USD trader, may be a beautiful site to see.

Thanks, and gave a great week.

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