It sure looks like a bear flag may be developing in this chart. It's not a perfect bear flag, but it fits if you look at it as a continuation of a larger downtrend. Flags and pennants are short-term patterns that can last from 1 to 12 weeks. Now, every sunken ship has a chart. But if this works out, it would see UUP go down to target level 2. That, in turn, would send gold higher.
This is not investment advice. You're in charge of your own portfolio and your own investment destiny.
You don't care about gold's seasonality at all, then?
ReplyDeleteI wrote a long piece about gold's seasonality for paying subscribers. To boil it down: ?Seasonality didn't work in the final quarter of 2013; there's no guarantee it will work now. I think buying by the Chinese and ETFs have the potential to be more supportive of gold than is seasonally expected. And the ETFs are buying again (they were selling at this time last year).
ReplyDeleteBut we'll see. The U.S. dollar is just one factor among many. I don't understand people who say one particular thing will move gold one way or the other. It's a combination of many different forces.
Weakness in the U.S. dollar would make it easier for gold to start the next leg of its rally. And we could definitely see that.