--> Author: Jim Sinclair
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Gold
Not only will the recent reaction in gold be shallow, it will also be short.
Regardless of what Technical Analysis (TA) you undertake, a dollar flop below.9200 will break gold up and out of its downtrend lines and seeking the $408 level. Reaching that level will, in my opinion, clinch gold's intentions to reach $508 as the next chapter in an unfolding bull market.
With gold shares clearly outperforming gold over the past few days, it makes one wonder if the ratio traders (God bless them) are bleeding all over the place.
The US Dollar:
Oh my, what a mess. This sick little puppy may spend a little more time dilly dallying around these levels but minus.9200 is beckoning hard. If a huge equity rally can't help the dollar, what can? The answer is"not much."
This sick looking currency (we'll call it a currency for now) is going to wrench gold out of this short cycle reaction and put it into a chop higher rather than lower once the buck ducks under the.9200 level.
I can't see the dollar taking six weeks to pull that off, so the gold market is not going to take six weeks to shake off the recent reaction.
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