Click Chart To Enlarge
I was reading a very interesting blog article on Gold, and worlds currency markets in general. Mr. Rubino from DollarCollapse.com has a very well thought out and researched theorem related to the collapse of the US Dollar and a continue metoric rise on gold due to what he terms “flat currency.”
While I would never claim to be an effective economist, nor a master of currency markets, I will claim to be an expert technical analyst, so let’s see what the chart says…
From a technical standpoint, gold has a long way to go in order for this theorem to become law. As you can see there is a huge divergence between both highs in both the PPO and the ADX vs. the price of gold. Gold is currently in a long term uptrend with a short term downtrend that is a falling wedge.
In order for Gold to maintain it’s nice upward trajectory, it’s going to need to see some very strong trading volume push it up past the downward resistance trend line which also just happens to be the 61.8% fibonacci retracement level in the current short term down trend. If that happens, the technicals setup would be a continuation pattern and would be a great entry point for gold.
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Posted on Wednesday, 8th October 2008 by Steve Warshaw
Tags: Currency, dollar, gold, investment, market, pattern, Technical, trend
Posted in Market Updates, Money Management, Technical Analysis | Comments (2)
October 9th, 2008 at 5:09 pm
it is a good and helpful analysis ….unfortunately for some reason the graph is all in black and cant be easily read eg the time scale nor the price ,,,,,i wounder if we can help
October 9th, 2008 at 5:18 pm
Hi Nate, Sorry I forgot to put the text below the chart, but you can click on it to make it bigger. I’ll update that now