opinion

Gold resists meteoric USD

Kitco Media
By Jonathan Da Silva
Published:
Updated:
Kitco Commentaries
Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Despite the dollar steam rolling higher, the negative divergence in price versus relative strength on the weekly timeframe, continues to grow. The chart below has been updated to highlight that divergence. The chart also displays how the DXY began it’s ascent in August of last year.

Now gold on the weekly chart over the same span of time:

As of now, gold bulls have held long-term support directly in the face of one of strongest USD rallies experienced in decades; a sign of strength. In parallel, sentiment for metals remains in the dump and calls for $1,300 gold have begun popping up. Could a cascade down to the $1,530 area occur with a breach of the $1670 -75 level? Absolutely. In this traders opinion, evidence suggests it would take a market in belief that the DXY is on its way to 120, and a FED more hawkish than is currently expected, for that to occur.

Thanks and have a great day

Kitco Media

Jonathan Da Silva

Jonathan Da Silva developed a passion for hard money and economics from a young age having been influenced by family who sought to teach me that "nothing is free", and the importance of intrinsic value early on. My interest in markets grew keener during the great financial crisis of 2008; leaning on family with vast trading experience, I began to self-educate on technical analysis and economics- drawing inspiration from the works of individuals like W.D. Gann and Adam Smith. I have been a proud member of the Kitco team since 2017 and hope that my writing inspires readers to consider an objective view of the metals, and the greater financial markets.

Mdi Earth Logo

Tags:

Contributed Commentaries
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.