Interesting Global Marco Charts

Chart 9: Recent US Dollar strength has not impacted Gold all that much

Gold COT 

Source: Short Side of Long

  • Consensus outlook is that Gold goes lower, much lower and that US Dollar goes higher, much higher. Maybe consensus is right. However, consider for a minute that USD Index has gone through the roof since July of this year and Gold still remains at around $1,200 per ounce – same level that it traded exactly 18 months ago. If and when greenback takes a breather and pulls back, maybe Gold could surprise on the upside. Technically, the price remains compressed in a wedge, which should see a break in either direction sometime in earlier 2015.

 

Chart 10: Gold mining shares are oversold & rest on major support level

Gold Miners vs 200 MA 

Source: Short Side of Long

  • One of the reasons why I think Gold might break upwards is because US Dollar rally is overstretched and overbought. Another reason is because Gold Mining shares are incredibly oversold, recently trading as far as 30% below its 200 day moving average. These producers also sit on an important support zone, where market participants have a strong memory of buying. Upside surprise is possible during early parts of 2015.

 

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