Gold Falling in Tandem with the Dollar – Bet on Gold to Survive
- Unexpectedly stronger NFP numbers didn’t prop up the dollar significantly, and didn’t hammer down GLD.
- Higher interest rates and QT talks haven’t been saving the dollar, but they have been clobbering bonds and gold as yields rise. The GLD traders are overly bearish.
- GLD has been falling since the flash crash on June 27th. The crash likely broke technical levels and resulted in automated selling around the world.
- Technicals show GLD is about to enter oversold territory relative to the dollar. GLD has already been oversold relative to other currencies such as the euro.
- A macro-view shows that higher interest rates may not be bearish for gold.
It’s been a while since I’ve written an article on gold, part of which has been a result of my moving to a new city. I want to wish everyone a belated happy July 4th last week, and also hope everyone enjoyed their weekends. Now, onto the markets!
I want to start off by talking a bit about the macro-outlook for gold, which I think still remains bullish despite this “higher interest rates” narrative that has caused a frenzy in the bond market. I will then narrow down the focus to the recent economic data, movements in the bond market, the dollar, and GLD, and then finish off with some technical analysis.
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