I consider gold a good indicator of the inflation fever out there. Note that it recently broke down from its latest rising channel (white.) So, it would be easy to say it’s done, that there’s little chance of it reaching 1380. Readers will recall I suggested bowing out at 1348.60 [the yellow arrow, see: Sep 6 Update on Gold.]
Personally, I’d close or trim back my long position here, or at least set some stops at this level. Every tick higher from here brings with it the risk of a sudden dump — one that need not be precipitated by news or events.
GC punched above 1348.60 for all of two days before succumbing. Its slide, since then, has correlated with that of the US Dollar — which understandably has gold traders’ knickers in a bunch. With the Fed’s inflation outlook due out shortly, does it still have potential to go higher?
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