Can The Gold Rally Last Longer Than A Day?
Gold has become the most hated commodity lately. What happened to the days when everyone had to own the precious metal? After all, more and more central banks around the world are printing money faster than ever. The Federal Reserve (U.S. central bank) is still creating $85 billion a month out of thin air. Other central banks in England, Japan, Asia, and Europe continue to do the same thing. So why has gold struggled so much?
It seems that gold is now trading inversely to the USD/JPY (U.S. Dollar vs the Japanese Yen). Today, the USD/JPY is falling sharply and this is causing gold futures to rally. Currently, the USD/JPY chart remains in an up-trend on the daily chart. Up-trending markets are very tough to fight since that is where the momentum is. Should the USD/JPY chart start to fall gold should start to trade higher. Traders and investors might need to take a wait and see approach, but I would say that you shouldn’t get too bearish on gold at this stage of the game. Gold could be setting up to make a sharp move higher very soon if that up-trend in the USD/JPY chart starts to reverse.
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