Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

A Look at Gold From the Non-US Dollar Perspective

By

How does gold pricing look in terms of the Canadian dollar, the Australian dollar, and the euro?

PrintPRINT
This was a week of very strong declines for precious metals. It seems that the main culprit was not the US dollar -- that should have actually helped the whole sector, as it declined heavily, too -- but the fears concerning the "fiscal cliff," which we discussed some time ago, and the lack of any solutions from the government so far. My firm believes that as soon as the problem is solved, the whole sector will rally strongly. That is even more likely since gold and silver are currently extremely oversold, as we'll see in the technical part of this essay. To see the true magnitude of the plunge, and try to guess where we can go from this point, we'll have a look at the yellow metal from the perspective of different currencies. But first things first: We'll start with the usual long-term chart of gold priced in USD (charts courtesy of http://stockcharts.com.)


Click to enlarge

In the chart, we see that prices have moved below the important 300-day moving average (the blue slope in our chart). If prices close the week below this level, which appears likely, then we will have an increased probability of significant declines. If prices do move much lower, it will be a huge buying opportunity and the RSI levels around 40 confirm this. Many times in the past, major bottoms have been seen with the RSI level near 40.

Having seen how the situation looks from the US perspective, let us move on to the first chart of gold priced in another currency, the Canadian dollar.



In this chart, we see gold's price has just moved a bit below the long-term resistance line. The move has not yet been confirmed. This type of price move has not been seen since late 2008 but with RSI levels extremely oversold, the bottom seems either to be in already or at least very close.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE