A break in gold below $420 an oz. would be a violation of the uptrend in place since 2002. It would not mean that the bull market in gold is over, but should a break occur, it would at a minimum signal a lower upward trajectory for the metal going forward. The Federal Reserve has been shrinking the size of its Treasuries / repo portfolio since year end 2004. This means anti - inflation determination on Their part. The US dollar has responded positively and gold
has entered a correction with support in the $410-415 area. The gold players have stepped up buying on prior dips, so the next week or so will be a good test of resolve. The XAU gold/silver stock index faced a similar test very recently, and broke decisively below its uptrend line. The dollar will figure in too, as it is approaching a short term overbought for the first time in a number of moons.
has entered a correction with support in the $410-415 area. The gold players have stepped up buying on prior dips, so the next week or so will be a good test of resolve. The XAU gold/silver stock index faced a similar test very recently, and broke decisively below its uptrend line. The dollar will figure in too, as it is approaching a short term overbought for the first time in a number of moons.
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