Dollar adjusted Gold: Foreign investors' gold perception

25 ott 2016

This chart shows the price of gold, adjusted by the dollar, which shows us how foreign investors' currencies fare against gold. So far, it's clear we have an uptrend, in the long term, but right now, we could be in the presence of a lengthy sideways consolidation. Most traders expect a massive rally, and a crash in equities. I think none of the two will happen, and we'll see a grindy, sideways price action in the shiny metal. Still, since the dollar is regaining strength, it's likely to see gold and the dollar outperform all other currencies.

We can monitor progress of this chart, to have an idea of the extent of gold's strength, and wether we are better off holding either USD or Gold, as a hedge against our local currencies (like in my case, since I live in Argentina, I need to hedge against horrific inflation).
The advance here is capped, by the horizontal resistance level at the 129268.30 mark on chart, but there's a new quarterly time at mode signal on chart, which implies a 38.71% rally from current levels by or before Q3 2019.
To turn bearish on gold vs foreign currencies, we'd need to see it drop under the blue box on chart, and stall here for one more quarter.

Good luck,

Ivan Labrie.