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Gold Traders Are Watching This Ratio

Published 04/12/2018, 12:11 PM
Updated 07/09/2023, 06:31 AM

Is gold ready for prime-time action? The shiny metal is testing the $1360-$1370 level for the fourth time this year.

One factor that has helped keep gold elevated is a weaker U.S. dollar. The chart below shows the ratio between gold and the U.S. dollar, which metals bulls need to see move higher, sending a bullish message to the broader metals sector.

Consolidation

As you can see below, this ratio has consolidated near its 2018 highs and is attempting to break out. It’s been a long tiring battle with plenty of setbacks for the bulls over the last 5 years. Still, they aren’t giving up easily. A breakout here could produce another gold rush.

The ratio at mid-week is moving higher and is trying to break above old highs at (2) and back into its falling price channel (1). A breakout here would send a bullish message to metals investors, one not seen in a few years. Gold is knocking, will the bulls answer?

Weekly Gold:USD Ratio

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