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Golden Elevator up?

Commentaries & Views

Has the DXY fallen too far too fast? Considering the magnitude of its recent run-up, and although the pace at which it is falling may slow, there is more room to the downside. The below weekly chart shows the space between now and the 102- 03 expected support zone. Note how stochastic RSI is dipping into oversold territory; it would stay there until the 102-03 (at least) level is reached.

Looking back, it seems our suggestions to hard money accumulators to consider adding tranches of physical to metal stashes, (both times under $1650 in the last 60 days) is playing out as expected; remember that physical accumulation of metal merits a different strategy than that for trading. For traders, the path to $1800-10 remains intact; a move down in the DXY to the 102ish support area would likely coincide with that equal opposite resistance in gold (updated weekly chart shown below).

The stock market continues its rise as well. Below is an updated weekly chart of S&P futures; clearly, the price is stretching into the overhead resistance area and may even see a false break through the overhead trendline to tag the moving average and Bollinger band; past that, we may need to consider whether the bull is back on.

If the DXY continues its precipitous crash through expected support (will likely eventually breakthrough regardless), stocks and gold will be propelled higher than this trader imagines most traders are currently capable of imagining. Below is the chart of the 2x leveraged Canadian gold mining ETF we have been presenting for the last two months, as originally shown in September, with the black arrow denominating a target gap that this trader still believes achievable. A move to the 200-day moving average looks in the cards as a first target, as 1800-10 gold comes in.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.