The sharp reversal under the 15-day MA in the dollar index suggests that the dollar is right back to square one as far as being in a position of technical weak point. This ought to even more reinforce golds immediate-term pattern and provide gold bulls another incentive to charge ahead in the coming week.
The strengthening pound put pressure on the U.S. dollar. The dollars latest attempt at completing the week above its extensively viewed, and mentally significant, 50-day moving average was a failure thanks to the rally in Britains currency. The U.S. dollar index (DXY) shown below shows the downward pressure in the dollar late recently. After a failure to reach the 50-day MA (blue line) on Jan. 24, the dollar index stayed well below this crucial pattern line. This validates that the dollars intermediate-term (3-9 month) pattern stays sideways-to-lower.
Gold and silver stocks have actually stayed under the radar in recent weeks, even as physical gold grabbed all the heading attention. The gold market appears to have found its wings once again after the dollars most current reversal.
The gold market appears to have found its wings again after the dollars most current reversal. Financiers are warranted in staying bullish and presuming that golds intermediate-term recovery will continue.
We found this post at https://seekingalpha.com/article/4235869-gold-finds-wings By: Clif Droke.
However, in the most recent trading session the XAU made an exceptional return after bouncing off its 50-day MA and getting almost 4% for the day. This was by far the XAUs best 1-day efficiency of the year to date, and the current rally put the index back above its 15-day MA. If the XAU manages to close above the 78.78 level (the Jan. 9 closing level) in the coming week, it will confirm a new immediate-term buy signal per the guidelines of my trading discipline. The 78.78 level is the closest high for the XAU and therefore of technical significance. A higher high above this level will likewise push the index out of its 5-month lateral trading variety and develop a rising trend for the XAU.
Here is a great article about gold cost having rally again. If you want to check out the original short article you can find a link at the end of this post.
I had actually previously discussed that as long as the $12.25 level for IAU wasnt broken, the immediate-term uptrend for the gold ETF would likely stay undamaged. Whats more, IAU should also continue to benefit in the months and weeks to come from the increasing need for gold based on the prepared for oil rate rebound gone over formerly.
More notably for gold traders, the dollars failure to increase above its 50-day moving average methods that the metals currency component remains strong. Ive argued in current reports that as long as the dollar index stays under the 50-day MA on a weekly closing basis, the gold bulls will continue to bring a decisive benefit moving forward. Ever considering that the dollar fell below its 50-day MA, gold bulls have actually had little difficulty in pushing bullion rates higher thanks to the weakening currency in which gold is priced.
A word on the actively traded gold mining shares is in order here. Gold and silver stocks have stayed under the radar in recent weeks, even as physical gold got all the headline attention.
Simply when it seemed as if golds rally was running out of steam, the metal got a big lift on Friday from a merging of bullish aspects. Not the least of these factors was the sharp decline in the U.S. dollar index as the British pound enhanced on speculations over Britains strategy to exit the British Prime Minister Theresa May will lay out the next steps in the Brexit process on Jan. 29 as the parliament debates on various modifications to Mays “Plan B” Brexit offer. Traders have hypothesized that a “no-deal” Brexit isnt most likely to take place, which was reflected in an outstanding rally in the British pound on Friday. The rally can be seen in the following chart which reveals the Invesco CurrencyShares British Pound Sterling Trust (FXB). FXB rallied 1.2% on Friday to a 3-month high, showing the gains made in the pound.
For gold traders, the dollars failure to rise above its 50-day moving average methods that the metals currency element stays strong. Ive argued in recent reports that as long as the dollar index remains under the 50-day MA on a weekly closing basis, the gold bulls will continue to bring a definitive advantage going forward. Ever considering that the dollar fell listed below its 50-day MA, gold bulls have had little difficulty in pushing bullion costs higher thanks to the weakening currency in which gold is priced.
British pound rally provides gold bulls the short-term benefit they need.Geopolitical uncertainty, dollar weak point continue to support the metal.Gold mining stocks are also teasing an intermediate-term breakout.
On a strategic note, we are still long the iShares Gold Trust after just recently taking some earnings. I also recently advised raising the stop loss for the remainder of this trading position to slightly under the $12.25 level on an intraday basis. An offense of $12.25 in the IAU would signal a decisive shift in the gold ETFs immediate-term trend.