Oct

19

 Most Gold followers disagree, and I will enumerate (should the former be the number one factor? Well, not always).

1. Metals have been at mercy of daily/intraday currency moves for many weeks now; thus first reason to suspect great Bull's virility.

2. Currency observations: Euro had zig-zag (as opposed to Bullish impulse) rise from 1.19 to 1.41 - while single-currency woes hit temporary lull. Swiss Franc appeared reluctant to continue into .94-handle for the first time in history, on straight-line daily voyage from 1.17 - just too much too fast for its Central Bank and its good. Japanese Yen got into its own historic 80-handle, very much to its government concern - who wowed to stop its appreciation. Australian Dollar traded to exactly par on a straight-move from 81 - and appeared to simply be along for the ride. Brazilian Real on a straight-move from 1.91 encountered daily intervention to hold it from slicing through 1.65 - and had to eventually succumb to its own Central Bank.

3. The actual reversal signal came from Canadian currency, which was stringing its fourth counter-trend daily move overnight. This will be important to remember– those wanting to hold Long USD positions, from here on, should do so vs. CAD– the only major currency not to have been in any Bull market of consequence vs. USD this year. CAD pierced parity for a split second October 14; since that day, CAD has made the US Dollar look like a real champ - and so very few observers noticed!

4. In fact, the very same tom-tom beat hit Inbox this morning: a widely followed newsletter (claiming over ten thousand paid customers) in its author's 52nd year: "Since the first week of June, the Dollar Index (which I quote every day) has slumped from 99.2 to 76.7, a lapse of over 23% in terms of international currencies, most of which have been declining. Has anyone noticed or am I living on an economic fantasy island?"

5. On Gold price charts' own technical position: it has rallied from $1,160 to $1,388 without a breather, buoyed ostensibly by Swiss Franc daily appreciation - no mystique. It's hard to think of any powerful entity, who is truly interested to help this trend– and simple cheering never made any sense to me. By this morning, intraday price movement from $1,388 record traced out (typically) one of the most Bearish patterns in charting universe: Monday's shortened impulse up to $1,376, followed by this morning's even shorter impulse up to $1,371. Yes, there is no headline change in Gold's fundamentals, but has there really been one on the entire recent run up from $1,160?


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