Once again, Gold advisory services are in cheer leading mode. However, It looks to me that gold is in an unresolved wedge (green lines). A break of this wedge, to the upside or downside, will confirm the trend.
Commercial interests are very short paper gold, and these interests have a relatively good track record. Unproved enthusiasm exists because we are not too far away in dollar terms from a big positive breakout. Resolution of this wedge will tell us which way we are going.
Gold In Canadian Dollars
Perhaps, Gold has begun to react to growing political uncertainty in Canada.
The dominant political party has been implicated in vocations including money laundering, kickbacks, and other activities descriptive of organized crime.
The real problem being that no clear leadership or majority has the political potential to fill the vacuum that will be created when the crooks are drawn, quartered, tarred and feathered.
Lets see if Gold will break out.
Gold to Euro
Gold is priced at 337 Euro, 344 would be a breakout
The Dow looks awful. When ever we get technical signals that the DOW will break down, everyone gets short the market. With such high levels of institutional interests, and little shares to borrow, the shorts are blown up in the process they provide fuel for a counter trend rally. Will this time be different?
If social security privation kicks in, it would complete the lock that institutions have on this market. Privatization might also create a buyer of last resort for treasury bonds.
The Ten Year
The 10 year looks like it too is at a point of inflection. Its truly a political question whether or not we take the hard path of contraction with awful future ramifications or the easy path of deflation and lower rates with worse potential. This wedge has been building for a long time and it will resolve to give us our answer.
My guess is that we will see the ten year drop below 4%.