Technical action in Gold does not look good
Gold has declined $100 or 7% at pixel time from its recent all-time high… even when the US Dollar is declining (correlation trade broken?)! I think it is primarily due to rising growth forecast for the global economy (read US economy).
Technically, the charts speaks for itself:
· Medium term trend seems intact on the 1-Year chart
· We are near strong support area at $1325
The 3-year chart, however is more interesting… gold is hanging to dear life with these support points:
· Green long-term trend line
· Green support line
· 100 day moving average
If the long-term trend line is successfully breached, then I think we will test 61.8% Fibonacci retracement of the rise from $700-1425 at about $1150
Economics 101 aside, commodities as a store of value will only go higher in the long-term (> 5yrs) because the only solution to massive public and private sector debts is inflation.