Gold thrust higher through resistance at 1404 early on Friday, moving as high as 1425 before falling back to retest the 1400 area. This morning, gold has moved higher again and is currently trading around 1423.
The move higher feels corrective in nature to us, despite the reports of massive physical demand from India and China which is underpinning the market.
The dollar is gaining some upside momentum once more, equities have bounced back a little from their recent sell off and oil is holding above $88 a barrel. However, the likelihood of a sharp sell off in equities remains and all commodities have been under pressure recently.
As we mentioned last week, any further significant falls will suggest deflation, a surprising and worrisome prospect considering the measures the central banks of the world have gone to avoid such an outcome. Will this result in even greater liquidity injections and even more radical economic stimulus measures? Can anything the central banks do actually work or are we headed for a worldwide period of deflation, as experienced by Japan for the past two decades?
Today's video looks at our targets for this corrective gold rally and our strategy for our next trade.
The move higher feels corrective in nature to us, despite the reports of massive physical demand from India and China which is underpinning the market.
The dollar is gaining some upside momentum once more, equities have bounced back a little from their recent sell off and oil is holding above $88 a barrel. However, the likelihood of a sharp sell off in equities remains and all commodities have been under pressure recently.
As we mentioned last week, any further significant falls will suggest deflation, a surprising and worrisome prospect considering the measures the central banks of the world have gone to avoid such an outcome. Will this result in even greater liquidity injections and even more radical economic stimulus measures? Can anything the central banks do actually work or are we headed for a worldwide period of deflation, as experienced by Japan for the past two decades?
Today's video looks at our targets for this corrective gold rally and our strategy for our next trade.