Hugely significant developments started in the markets yesterday and have continued this morning with an important breakdown in the U.S. Dollar Index. We’ll examine the greenback situation in more detail in today’s Morning Musings, and how it may kick-start the Venture which is showing some patterns similar to a critical recovery phase in 2009.
Gold, meanwhile, has done exactly what John’s charts were predicting – bullion has climbed to the $1,150 level where there is considerable resistance. Given that the U.S. dollar has finally lost momentum after a record run that started in the summer of 2014, the possibility that Gold’s $100 move from its November multi-year low is more than just another “dead-cat” bounce has to be taken very seriously.
As of 6:00 am Pacific, bullion is up $11 an ounce at $1,153. Measured near-term Fib. resistance after the recent breakout from the cup-with-handle pattern is $1,175. Temporarily overbought conditions in Gold could easily emerge at some point this month to be followed by a modest but healthy pullback, but there appears to be something different about this latest rally in the yellow metal.
As we mentioned last week, what we’ve been watching over the last couple of months could in fact be the start of a new bull market in Gold, something that could become much more obvious to most investors later this year.
