Gold Conquers from East to West

Gold, even in JPY terms, is looking likely to breakout soon. The next target level is more than 10% higher.

The JPY normally does well in times of market stress given its funding currency status. Even as stocks have rallied since the start of April the JPY has held up (USDJPY is effectively unchanged). Gold’s out-performance reflects its dominance all round. 

The next target on Gold/JPY is the all time high from January 1980 at JPY 205k. Given the JPY is not weakening significantly, even when equities have bounced this month, this suggests Gold is likely to rally aggressively against the USD. Assuming USDJPY stays around 108 it would imply Gold in USD terms at $1,900 – the same short to medium term target that is projected from the historical comparison with 2008 post Lehman’s crisis – see previous post called Gold where next? . A slip in USDJPY, which is also a serious risk, would put Gold/USD even higher.

The signs are all lined up this quarter for the precious metal to continue to rally against all paper currencies.

SKA