After a feeble bounce that failed to break 1300 on Friday, gold was on the defensive again yesterday, falling steadily to 1280 before finding support. The market appears to be trying to form a bottom here and we would not be surprised to see a rally develop after the sustained sell off last week.
Equities and oil also fell hard yesterday whilst the dollar rallied - price action that is clearly signalling deflation. This is most likely linked to the liquidity crisis in China, therefore a resolution to this problem will see stocks resume their uptrend.
However, we do not see the same outlook for gold over the next few months, as rising interest rates, low inflation and a perceived US economic recovery are all contributing to massive ETF withdrawals and a strong downtrend in gold.
We are now in the weakest part of the year for gold historically - it is unlikely that we will see a strong rally develop during the "summer doldrums" and a continuation of the downtrend is the most likely scenario until August at least.
Today's video for subscribers looks at the recent trading action and our strategy for our next trade.
Equities and oil also fell hard yesterday whilst the dollar rallied - price action that is clearly signalling deflation. This is most likely linked to the liquidity crisis in China, therefore a resolution to this problem will see stocks resume their uptrend.
However, we do not see the same outlook for gold over the next few months, as rising interest rates, low inflation and a perceived US economic recovery are all contributing to massive ETF withdrawals and a strong downtrend in gold.
We are now in the weakest part of the year for gold historically - it is unlikely that we will see a strong rally develop during the "summer doldrums" and a continuation of the downtrend is the most likely scenario until August at least.
Today's video for subscribers looks at the recent trading action and our strategy for our next trade.