First off, if you have an interest in the price of gold and have not already done so, I highly recommend you check out Steve Hochberg’s 2-part Elliott Wave video presentation on gold (disclosure: free sign up to Club EWI brings a small commission to yours truly ). With all his zigs & zags, waves and patterns he ends up at the same place I do with my simple version. I may use less cluttered methods, but I find this stuff very interesting.
With markets at a key juncture, the US dollar over bought (but bullish), the precious metals, commodities and increasingly, global markets over sold but bearish and US stocks acting as if October 2014 could at least recall memories of October 2008, I want to try to weave all this together around the simplistic monthly chart of gold, which is the asset that would provide liquidity for asset market refugees if the macro really were to get very negative.
It is important to simplify folks. Gold is not going to go up because of Modi and Indian Wedding season. It is not going to go up on China demand and it is most assuredly not going to go up because the US stock market is going up, as if it were simply an asset class that got left out of the party. Commodities actually would have a better chance at that than gold.
Gold is going to go up (at least in relation to most assets) when confidence in policy making starts to wane… period. I am going to keep this simple monthly chart on radar going forward because it has long-since broken the Triangle and it is a gauge on the macro.
This post was published at Gold-Eagle on October 8, 2014.
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