Why is nobody writing about the downside break out in gold?
The Gold bugs have been feeling the heat lately. Gold as a safe heaven trade seems rather dead. The big almost parabolic move has attracted many clueless investors, all waiting for Gold to print 2k, minimum. Well, it sure looked so, but with the 1600 level broken to the downside, many are sweating again. The Trader wrote about the big formation in the charts a few weeks ago. Gold is at cross roads here, let’s see if people start puking, or if we will get the last bounce up? Special thanks to one of our readers, Erik, for reminding us about this update.
Gold and Silver charts update below.
Gold
Silver
Charts Infront
There is no way, in my opinion, that gold and silver will not break major support because the smart money has been selling since April 11 and there are still way too many gold/silver bulls who are saying that the dollar is toast. For now, the opposite is true. Look for gold to go to 1400 and silver down to 24 at least, probably even a bit lower for each.
Where is the panic, the I wish I never bought any, the deflationary spiral talk, etc… like we had in 2008? Until that happens, forget about a bottom, look for a stronger dollar.
Jon
The smart money are the central banks along with the miners, they are buying not selling. The dumb money trades off of technicals not fundamentals, they are momentem buyers. The dollar exchange rate is only a secondary influence on metal prices, more important are negative interest rates , budget deficits and current account imbalances. The dollar exchange rate is at an elevated level seen years ago, and gold is twice as expensive, why do you think that is?