The inflationists and gold-haters have been able to drive gold down to a new low. The P&F chart of gold below looks scary, but as I see it, what we are looking at is an ever-larger and growing base for gold. The base has been forming ever since July of last year. It's been practically begging speculators to short gold. The more shorts, the better. I also think there's been a lot of tax-loss selling by fund managers in gold and particularly the gold miners.
Meanwhile, all eyes are on the dollar, which is holding just above its 50-day moving average. It looked as though it was forming a head-and-shoulders bottom, but now the right shoulder is deteriorating.
A P&F chart shows the dollar remains bullish -- but if the dollar hits the 78 box, that will trigger a sell signal and upset the whole apple cart.
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