It’s no secret that the gold market has been rallying recently, despite today’s volatility, but did a plunging US dollar will really ignite the gold market.

A Bearish Call On The US Dollar
June 10 (King World News) – Top Citi analyst Tom Fitzpatrick makes major call on the US dollar:  Over the past few weeks the clearest trend in markets has been in fixed income with the drop in yields globally and the repricing of the Fed for this year. While that is still in place especially following Friday’s data, there seems to be another emerging trend now…the US Dollar…

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As we highlighted last week, it is looking weaker in more places than it is looking strong. The weekly close below 97 on the US Dollar Index confirms a bearish break that opens the way for at least 95.7 in the short term (see chart below).

Fade Rallies: US Dollar Plunge To Continue 

We are currently trading at the 200 day moving average which is still worth watching as we held it on a daily close basis. A close below there would only amount to another bearish break (see chart above).

Triple Top Troubles
Triple negative divergence on the weekly chart is confirmed reflecting weakness and the risk of reversal of the ‘uptrend’ that has been here for approximately a year (see chart below).

Triple Top Divergence Spells Trouble For The Dollar

Support levels below 96.70 double top target are at 95.02 and then 93.71.

Euro Breaks Out vs US Dollar
Meanwhile, the euro rallied through the double bottom neckline and trendline resistance from last year and sustained the break on a weekly close basis (see chart below).

Euro Has Now Solidly Broken Out vs US Dollar

Euro Rally To Continue
The short term double bottom targets 1.1420 and resistance above there is seen at 1.1570. More medium term levels come in at 1.1815 – 1.1851.

The Gold Breakout & Volatility
King World News note:  Continued US dollar weakness will confirm the breakout the gold market has experienced priced in US dollars. As Egon von Greyerz has been noting, gold has already broken out vs many other currencies all over the world. But the gold breakout in US dollars will spell major trouble for the gold bears medium- to long-term, despite the short term volatility like we are experiencing today. Meaning, the long-term trend is confirming much higher prices for gold.

KWN has now released Egon von Greyerz’s powerful audio interview and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.

***Also just released: Greyerz – We Will See A Panic Into The Gold Market CLICK HERE TO READ.

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