Weekly updates on the Financial markets with a focus on the underlying trends that are moving asset classes. I focus on economic fundamentals and inter market relationships between different asset classes in order to determine market direction. Emphasis is also on technical analysis of chart patterns.
Thursday, August 23, 2012
Gold making a move higher
Hopes for impending quantitative easing by central banks, both in Europe and after the release of the July FED minutes yesterday, along with (to a much lesser extent) Israeli sabre rattling against Iran are fueling a rally in Gold but also the miners:
(click on chart for larger image)
Gold has taken out the $1,625.00/$1,630.00 level I've been monitoring and I'm looking for additional confirmation by it breaking thru the downtrend line I've drawn on the chart (red dashed line).
Interestingly, the miners which have been beaten up pretty badly in 2012 are also showing signs of life:
We've got a ways to go before I feel comfortable with this rally but momentum is strong on this daily chart.
And look at Silver:
Another battle in the deflation/inflation war is brewing and at least in the last three days inflation is winning.