Yes, the $298.00 mark was destroyed by fears of devalutaion.
I did say that it was a short term oppertunity. And the trend was still down. But if you look at the Gold trend from this chart:
cabal13.dyn.ml.org
How can any one expect an upward trend in Gold and for that case, the XAU? Since both are showing a building negative MACD.
cabal13.dyn.ml.org
The XAU is suffering from inflection point volatility, based on currency instability {YEN/CDN} now that the trend for the YEN, is more clearly deteriorating, the XAU should accelerate down to around 52-56, in the coming weeks. {The inflection point fakes out the market place}
In comparing a 'World currency'/USD {A} since early 1996, you can see that the trend is up. And by considering Gold as a safe currency, you can apply it as a second 'world base' currency{B}. You can factor out the effect of Gold onto currency, and determine which way Gold as a trend, based against USD, will go over the longer trend{C}.
A) cabal13.dyn.ml.org
B) cabal13.dyn.ml.org
C) cabal13.dyn.ml.org
This suggest a lower gold price, maybe 265 by Nov {linear regression}
And should the M2 value increase again, due to US Fed, than you can expect a further/faster decrease in Gold.
cabal13.dyn.ml.org
On 04/20/98 {or so} the M2 rate reached it's local maximum. Since than the DOW 30, has been going sideways and the broader markets have turned downward. This is why you can draw a correlation between M2 and market corrections. Look at 1987 crash {marked in RED} where the downward trend, broken by US FED adding liquidity, was really a removal of liquidity. M2 alone doesn't cause a crash, but with M1, M3, and 1 year t-bills rates you can really find them.
Summary: Gold is going down relative to the USD. OR the dollar is going up. A correction will take the Dow down 25%-55% from 9350. Just a matter of time. The longer it takes the harder it'll hit. The baby bear market started 04/20/98! |
