Our resolve was tested last week as metals and miners utterly collapsed. The price action was extreme and had a climatic feel. Prices reversed on Friday, and I think we will see, at least, a 1-2 week rebound as the Dollar descends into a cycle low.
I will need to measure the next rally for strength and durability. We could see wild and terrifying swings. Gold would have to close progressively above the $1240 level in the coming days/weeks to promote a run back to the $1300 level. Prices would have to close above $1310 on a weekly basis to restore the bullish potential. Any rally that fails to recapture $1240 would promote additional weakness in gold.
I think I’ve seen enough to support a rebound play in miners. On Monday, I’ll see where prices are and consider another tranche of JNUG. A rebound should fill Wednesday’s gap and possibly the gap from Monday.
US DOLLAR WEEKLY
The dollar formed a bearish shooting star. Closing back below the 200-week MA within a week or two would support (at least) an interim top. Prices would have to breakdown below the longer-term red trendline to promote a meaningful decline.
US DOLLAR DAILY
Going through the data I found most cycles turn every 54-60 trading days. We are 45-days into the current cycle. Closing progressively below the 10-day EMA would support a cycle peak and subsequent decline into late August early September.
EURO WEEKLY
The Euro tested the bottom of the support area and established a bullish reversal; prices closed above the 200-week MA. A weekly close above 116 would recommend an intermediate low.
EURO DAILY
The daily Euro chart needs to close progressively above the 115.25 gap to authorize an interim low.
GOLD WEEKLY
Prices have been due for a low for over 2-months. The trend, technicals and COT data have all reached extremes. Large speculators are net short for the first time since 2001. There are a record number of shorts and both the MFI and RSI (below) are oversold. The dollar looks ready for a pullback, perhaps that will relieve the downside pressure and allow a bottom in gold.
