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Gold moving as expected : Now what?

Commentaries & Views

On Monday, I wrote that I thought gold had room to move into the spot $1905/10 area; and today’s CPI seems to be the catalyst to get the move started. I tend to show shorter-term timeframes for the most part but occasionally like to zoom out to gain a broader perspective, especially when a move looks to be strong and trending.

Below is a monthly chart of gold; note the top range of the Bollinger band at $1950, which I believe is set to be tested. In fact, an overshoot of the top of a Bollinger band really would not surprise me.

This does not mean I think gold is blasting to all-time highs without pause. Quite the opposite – I think bulls should expect a hard and deep pullback at some point along the way – perhaps sooner rather than later should that $1920ish level (or $1950 thereafter) prove stiff resistance.

Another look at the US 10 YR yield (daily chart) shows that a lower low is still the probability. My bias is to be long metals (and strategic stocks) for as long as the pattern is in play and the yellow support zone is in reach.

Thank and have a great weekend!

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