28 Oct 2013
Will gold really continue higher? The DXY’s technicals say “yes” in the short-term
FXstreet.com (Barcelona) - Ever since global traders resigned themselves with the idea that the US Fed would hold off on any QE-tapering measures for now, US rates and the DXY have tumbled – boosting gold and silver simultaneously.
Gold on the verge of busting out above more resistance as DXY remains under pressure
We’re seeing bond yields in the US tumble as global investors have come to the conclusion that the Federal Reserve will not be tapering their QE3 program until at least after the “debt ceiling” and US budget issues are resolved in a more permanent fashion – hopefully early in 2014. That has caused the US Dollar to break to new short-term lows again and again recently. That, in turn, has given gold and silver a much needed boost – even as other commodities languish due to their own fundamental forces.
Technicians calling for more downside in the yellow metal
Gold closed above short-term technical resistance of 1330.80 last Tuesday – transforming the technical picture from bearish to short-term bullish / intermediate-term bearish. Now, gold is bumping its head on a short-term ceiling at 1353.80, but all signs (including the DXY working its way down to 78.63 target) point to more of a rally.
Tim Thielen of The Sea Change Report is hinting at the idea of gold working its way up to the 1,475 level – with some healthy pauses along the way. He notes that this is not a high conviction call yet, though, as that type of upside potential in gold does not mesh well with his current outlook for only limited downside in the DXY.
Thielen notes that either the DXY will blow through downside support (giving gold the tailwind needed to make it to 1475) or the DXY will hold at support at 78.63 and gold will fall short of reaching 1475. He noted recently that while possible, it is difficult to imagine DXY holding support AND gold simultaneously ripping to 1475.
Thielen said he would be using any dip to 1328 – 1330 as an entry point for long positions with stops in place on any close below 1328.
Gold on the verge of busting out above more resistance as DXY remains under pressure
We’re seeing bond yields in the US tumble as global investors have come to the conclusion that the Federal Reserve will not be tapering their QE3 program until at least after the “debt ceiling” and US budget issues are resolved in a more permanent fashion – hopefully early in 2014. That has caused the US Dollar to break to new short-term lows again and again recently. That, in turn, has given gold and silver a much needed boost – even as other commodities languish due to their own fundamental forces.
Technicians calling for more downside in the yellow metal
Gold closed above short-term technical resistance of 1330.80 last Tuesday – transforming the technical picture from bearish to short-term bullish / intermediate-term bearish. Now, gold is bumping its head on a short-term ceiling at 1353.80, but all signs (including the DXY working its way down to 78.63 target) point to more of a rally.
Tim Thielen of The Sea Change Report is hinting at the idea of gold working its way up to the 1,475 level – with some healthy pauses along the way. He notes that this is not a high conviction call yet, though, as that type of upside potential in gold does not mesh well with his current outlook for only limited downside in the DXY.
Thielen notes that either the DXY will blow through downside support (giving gold the tailwind needed to make it to 1475) or the DXY will hold at support at 78.63 and gold will fall short of reaching 1475. He noted recently that while possible, it is difficult to imagine DXY holding support AND gold simultaneously ripping to 1475.
Thielen said he would be using any dip to 1328 – 1330 as an entry point for long positions with stops in place on any close below 1328.