By Stephen W. Cox, CMT
For some time now the U.S. Federal Reserve has been printing dollars aggressively but the price of gold, the classical inflation hedge, has languished. Traders who may be doubtful of the dollar/gold relation can see in the long-term charts that both the dollar and gold have ceased to trend for the time being.
Evidently the spark that will push gold and the dollar in opposite directions is absent now and the yearly charts of the dollar and gold may not diverge until the end of next year. But the charts imply that gold prices will trend favor.
Apparently gold’s alter ego, the ICE Dollar Index, has sputtered this year. The Index poked up above chart resistance at the middle red channel but now has lapsed back and so may be vulnerable. Certainly the Index won’t be freely bullish until it clears the highest resistance, the highest red channel.
The yearly chart of spot gold makes it clear that 2013 so far has been good for gold sellers. But it may that 2014 will beRead More »from Despite Aggressive Fed Inflation, Gold Is Weak