Gold has started the year off strong and held up surprisingly well given some tough talk from Fed officials today. After a textbook bounce off support at 114.50, GLD has broken through its short-term downtrend and is now in no man’s land.
Maybe a move to the 50-day is in the cards, but we’re selling as it’s tough to see a sustained move higher for gold in a higher interest rate environment. The yellow metal faces the headwinds of further tapering, a shrinking U.S. current account deficit, and a negative second derivative in global foreign exchange reserve accumulation. Could be wrong and always with a stop.
(click here if chart is not observable)