On the heels of another wild trading week, the gold price is set to attack the key resistance in the $1,365 area…again.
Double Bottom In Gold
May 11 (King World News) – From top Citi analyst Tom Fitzpatrick: The double bottom in gold (highlighted in blue) targets $1,334. Another way of reading this chart is that it has turned from the base of the range and may end up back at the top of it near $1,365, which is more than 3% away.
Gold Short-Term Target Of $1,365
This overlay shows a mismatch between Gold and the US dollar over the past 2 weeks for the first time since the start of the year (see chart below).
Given what is now happening (Gold higher and Euro/USD holding the 55-week moving average), the picture is beginning to show us that the recent US dollar bounce was corrective in nature and overdone.
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$1,365-$1,400 Resistance On Gold
King World News note: If the dollar bounce is indeed over and begins to reverse significantly lower, that would be the setup for a break below the key 87-88 level on the US Dollar Index. A break of that key level would send the dollar plunging to 84, setting up the gold market for a major breakout above the $1,365-$1,400 area.
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