The prospects for gold over the next few months do not look good. When the dollar dropped sharply in March, gold managed only a meager rally. The dollar dropped even more precipitously in May, and gold made a lower high. Now, the dollar looks ready to finish up some sort of 4th wave correction, possibly a triangle, and gold has made little upside progress. When the dollar finishes wave (5) down to complete a large flat correction, gold may manage a bounce back to the 950 to 960 level, but it should be short lived.
Once the dollar finishes the flat correction, a significant rally should ensue that may last several months which should drive gold down to 700 or below.
I am maintaining my short gold position in the DZZ until I see strong evidence that contradicts the above analysis.
The stock indexes today likely completed wave A of Y of a double zigzag correction. We should see a bounce lasting another day or two followed by wave C down to complete the correction. We would change this expectation should the indexes break below the lower parallel trendline of the correction channel (I'll show it if it happens.)
No comments:
Post a Comment