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Dollar strength decimating golden dreams

Commentaries & Views

The below chart is gold on a 4-hour timeframe:

And not coincidentally, here is the DXY as a mirror image along the same timeframe:

From a daily viewpoint, the DXY hit the overhead trendline this morning. Dollar bulls want momentum to stay overbought (example shown in chart) while price breaks above the line. In that scenario, a move to 105.5 becomes the probability.

The daily gold chart below: Gold might be in for a hard ride to $1850 with momentum flatlined on the way down. Bulls have failed to recapture the 200-DMA just this morning; prices are also failing to hold the June lows this week.

Of course, the first warning shot was the weekly close below $1935.

It now looks like stackers will have an opportunity to get in even cheaper in the days/weeks ahead while bullish sentiment is crushed. I do not think gold is never going up again, but a wash-out now seems even more likely before another move-up.

Thanks, and good luck.

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