Putting the “Bull” back in Bullion
The following is a short technical report on the latest Gold developments as it is now looking bullish again across the board.
- Over the past 24 hours XAUUSD posted a bullish daily reversal indicating further gains.
- The equally weighted Gold-G4 Index has stabilised at the channel base and is forming a double bottom (Bullish).
- Among fiat currencies, the most important level to watch is 6.8457 on USDCNH which was the years low and the double top neckline (double top at 7.1965). This level will eventually give way as the USD continues falls almost across the board.
- With CNH being one of the outperformers in major currencies, it is worth noting that XAUCNH also posted a bullish daily reversal and also looks to be heading higher.
Is it a coincidence that these signs are emerging just before the Fed chairman is about to speak? We don’t know but the bottom line is that Gold once again looks bullish whichever way you want to measure it. Charts below…
SKA
2 comments
If gold can be looked at as a 30 year zero coupon, then a drop or rise in real rates moves the price around 30 pct either way, or .. .
If gold is a currency then supply demand versus other currencies is important. Gold supply is ball park 1 pct per year. What is the global change of M2 of the main global currencies?
The United States M2 YoY percentage change is currently running around 23%. Of course that is extremely high this year but looking back over the past 10 years it has typically been between 5% and 10%. The lowest points were 1.7% in March 2010 and then 3.1% in Nov 2018 in that 10 year window. The ECB annual growth rate of M2 is running at 10%. Japan is running at just under 8%.