The last Gold Market update, posted at its recent peak on the 11th, called for a significant reaction back by gold, and that is exactly what has since happened. It also called for a rally in the dollar, which hasn’t happened – yet, but as we will see in this update, it looks likely to happen soon, and given that gold’s COTs have barely eased on the current reaction to date, it therefore seems likely that gold will lose more ground on a dollar rally.
On gold’s 2-year chart we can see that it was at a good point to reverse to the downside early in the month as it had risen into the zone of substantial resistance in the vicinity of its mid-2016 peak. A potential channel is shown, and if it should drop back to the lower boundary of this channel, as looks likely given the immediate outlook for the dollar, it would drop back to about $1250, and COTs suggest it could go lower still.
This post was published at Clive Maund on Sunday, September 24, 2017.
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