Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and U.S. Dollar Inverse Relationship Trend Implications

Commodities / Gold & Silver 2009 Sep 20, 2009 - 01:20 AM GMT

By: Douglas_V._Gnazzo

Commodities

Best Financial Markets Analysis ArticleGold - Gold was up for the week, gaining $1.40, to close at $1007.60 (continuous contract). The daily chart shows gold still positively above its recent breakout. The trend remains in place until such time that it isn’t.

Some consolidation is warranted, and perhaps a test of the breakout. RSI is overbought and turning down. All in all the bulk of the evidence is bullish, although waning slightly.


So far, gold seems to be probing the general area of overhead resistance. This week’s inverted hammer (candlestick) casts a bit of doubt on the direction of GLD. This candlestick usually foreshadows that a trend reversal MAY be at hand. It needs to be confirmed by subsequent price action. A heads up is warranted.

The weekly chart still shows the inverse head & shoulders formation intact. Price has bumped up into overhead resistance marked by the neckline of the formation. As of yet, price has not broken out on expanding volume, which is imperative. See complete details in the full market wrap for subscribers.  This questions an immediate break out to new highs.

On my website this week there was a discussion about golden crosses: what they were and what they meant; so I decided to revisit the topic here.

The chart below was posted months ago, but remains relevant. It shows all of the golden crosses (50dma crosses over/above 200dma) since the inception of the bull market.

A few things to notice: we are still under a positive golden cross from earlier this year, which portends higher prices long term; after EVERY golden cross a significant move up occurred; and lastly, notice that most, but not all of the positive crosses, were preceded by a negative cross (50dma moving below 200dma). These (negative crosses) are marked by the yellow circles.

Now, for some more inter-market relationships; this time between gold and the U.S. dollar. For most of its history, gold and the dollar have moved inversely, or in opposite directions from one another.

If the dollar was up, gold would be down. If gold was up, the dollar would be down. The first chart below shows this inverse relationship intact.

The next chart focuses in on the timeframe from the beginning of this year to about March – the price action is highlighted in yellow. During this time both the dollar and gold rose together.

This event has ended, but the question still lingers: might it happen again? I think it might, but I have no idea when. The future is not predictable.

I think it will take another scare or hit to the financial system to cause such a flight to safety, but that is just an opinion – not fact.

Once again, this is not a sign of stability or strength regarding the monetary system, but one of instability and weakness. Such is the nature of paper fiat debt-money or promises to pay.

For a free trial subscription email your request to dvg6@comcast.net. View over 30 charts covering stocks, bonds, currencies, inter-market relationships, commodities, gold and silver, and the mining stocks. The economy is examined in detail with almost a dozen charts included. Stop by and check it out.

Good luck. Good trading. Good health, and that’s a wrap.

Come visit our website: Honest Money Gold & Silver Report
New Audio-Book Now Available - Honest Money  

Douglas V. Gnazzo
Honest Money Gold & Silver Report

About the author: Douglas V. Gnazzo writes for numerous websites and his work appears both here and abroad. Mr. Gnazzo is a listed scholar for the Foundation for the Advancement of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.

Douglas V. Gnazzo © 2009 All Rights Reserved


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in