23 Jul 2013
Gold squeezes the bears hard as prices up over 3% at 1,336
FXstreet.com (Barcelona) - The precious metals were on fire Monday on a weak DXY and an important short-term technical breakout above 1,300.30.
Fundamental and economic news weighed on the US Dollar Index Sunday and Monday
First, it was the news of Detroit’s bankruptcy – strike one. Then, it was rumors of federal investigations soon to be conducted into the commodities industry practices of some of Wall Street’s most powerful goliaths – strike two. Then, the Chicago Fed Activity Index and the Existing Home Sales data in the U.S. came in below expectations – strike three.
The three strikes against the DXY index were enough to cause a technical break of support for the greenback. The overall bearishness in the DXY gave the commodities complex in general and the gold and silver markets in particular a major short-term boost. What happens next in those markets may continue to depend heavily on the direction in the greenback.
Gold’s break of $1,300 a big short-term win for bulls
Gold futures blasted through to previously stingy 1,300.30 “correction resistance” level Monday and have already closed above the first Fibonacci resistance level at 1,327. According to Tim Thielen, CMT, the author of The Sea Change Report, gold may hit a short-term ceiling at around 1,353 for what he calls wave “a” of an overall “abc” upside correction. From there, Thielen believes gold will pullback and retrace some of the recent gains. It is on that pullback where Thielen says his clients that don’t already own gold will be buying. Short-term resistance for gold is the afore-mentioned 1,353 with the 38.2% retracement line at 1,418 above that. First support for gold comes in at the April low of 1,322.30 and is followed by horizontal line support at 1,285.
Fundamental and economic news weighed on the US Dollar Index Sunday and Monday
First, it was the news of Detroit’s bankruptcy – strike one. Then, it was rumors of federal investigations soon to be conducted into the commodities industry practices of some of Wall Street’s most powerful goliaths – strike two. Then, the Chicago Fed Activity Index and the Existing Home Sales data in the U.S. came in below expectations – strike three.
The three strikes against the DXY index were enough to cause a technical break of support for the greenback. The overall bearishness in the DXY gave the commodities complex in general and the gold and silver markets in particular a major short-term boost. What happens next in those markets may continue to depend heavily on the direction in the greenback.
Gold’s break of $1,300 a big short-term win for bulls
Gold futures blasted through to previously stingy 1,300.30 “correction resistance” level Monday and have already closed above the first Fibonacci resistance level at 1,327. According to Tim Thielen, CMT, the author of The Sea Change Report, gold may hit a short-term ceiling at around 1,353 for what he calls wave “a” of an overall “abc” upside correction. From there, Thielen believes gold will pullback and retrace some of the recent gains. It is on that pullback where Thielen says his clients that don’t already own gold will be buying. Short-term resistance for gold is the afore-mentioned 1,353 with the 38.2% retracement line at 1,418 above that. First support for gold comes in at the April low of 1,322.30 and is followed by horizontal line support at 1,285.