The gold price has recently entered a sharp downtrend. It is fast approaching an oversold reading
on the important RSI technical measure and may, given its inherent volatility, test intermediate
term support at the $1200 level. A relatively strong US economy, rising short term interest rates,
and more recently, Trump inspired talk of a trade war, have all worked to strengthen the USD.
Sudden dollar strength has weakened trader support for bullion. Gold Weekly
Within a couple of weeks, all markets players may get a stronger sense of whether the Trumpsters
are running a bluff on China or whether They really are ready for a long, long overdue battle
with China over Its mercantilist policies. Knowing Trump, if his crew can establish some headline
trade and investment restrictive programs which do not upset the apple carts but give him some
bragging rights, he may go for that rather than go for the more punishing programs that could
could unsettle the US economy and bring blame to his doorstep. If the tough talk is just a typical
bluff, the dollar may eventually lose some ground and usher in a long side trade in gold.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!