Gold has been rallying I entered at a bottom at 17250 and have two lots on at the moment if we break 1345.00 I will add another lot in a buy.
The dollar is having a hard time despite speeches by the FED saying otherwise, bond prices are heading lower and I hate to say it but they may have well have defaulted when they had the chance as the effects seem to be the same, just slower than if they had defaulted. China is still hoarding Gold and India have said that they could pay their debts in Gold and are using gold to buy oil. Emerging markets are no longer seeing the USD as the world reserve currency (even though it officially is!).
Yesterdays Non Farm Payrolls although were OK caused a rally in Gold and against the US dollar. Although there has been pullback it is minimal and really backs up my thoughts that Gold is in for a long ride upwards, could we make 1500? I don’t know but I would expect a pull back from 1418 so targets in at 1400 if we break above 1345.00 (which we did yesterday).
Here is the daily Gold chart. You can see how I have copied the pattern from it’s last rally to give us an idea of where it may go, what is interesting is the levels almost 100% match the copied movement, but there is far less pull back which makes me think we are in for a much bigger Gold rally.
Incidentally trading Gold does require a huge stop loss. (Just look at the movements), I use a 3000 (yes, 3000) pip trailing stop. To compare, GBPUSD 35 pips on average, 25 pips on USDJPY. But at the moment I am only interested in trading Non-fiat currencies like Silver, Gold, Copper etc. You can’t do QE on Gold because you can’t make any more than there actually is.
I heard a rumour that Ben from the FED wants to drop the dollar 25% to help with exports. I think he’s getting his wish if this is true.