Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss whether this recent move higher in gold above the downward sloping trendline of lower highs, would be considered a breakout at this point. He doesn’t feel it would qualify because a true breakout is more above having pricing close above key horizontal pricing resistance levels, and a weekly and monthly close above $1900 is still the line in the sand to watch. Jordan points out that gold is still down below the 50% retracement level in gold around $1875 and that a true break out will be a sustained move above $1900 on a closing basis. However, Jordan is very encouraged by the move in gold versus foreign currencies, and that gold has improved versus the general US equities markets.
When asked if he is still expecting the corrective move down prior to the rate hikes, he now feels that is very unlikely with gold rallying and only 4 weeks left before Fed starts it’s tightening cycle. However, if the Fed hikes to aggressively, causing a recession or market correction, then that could still be a risk in the precious metals sector as well.