Gold Bulls Don't Want This Indicator To Peak Here
Chris Kimble | Jun 26, 2019 02:10PM ET
Gold has been strong as the U.S. dollar has been weak. This combo has driven the Gold:Dollar ratio to a key price zone and momentum level that looks to be important to metals bulls.
This chart looks at the Gold:Dollar ratio over the past 6 years. The long-term trend is down, while the trend over the past 3 years is pretty much flat (sideways trading range).
The recent rally has the ratio testing the 2018 highs as well as its 38% Fibonacci retracement level of the 2012 highs/2015 lows at (1).
While testing these key levels at (1), momentum is the highest since the 2017 highs. The bullish case for metals is facing an important breakout/resistance test at (1).
One thing is for sure, metals bulls have their fingers crossed that a lower high peak does not take place at current levels.
If the ratio breaks above resistance at (1), it will send a bullish message to metals that they haven’t seen in years.
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