Going, going…. gold!

Breakdown. 

gold2

As I discussed this morning, gold had well and truly rolled over after its equities rout-induced bounce, and was again staring at vital support at $1180, with an abyss beyond that.

breakdown

It’ll be interesting to see if it does capitulate from here. The swan-dive below support has come in the wake of the BOJ announcement that its increasing its QE program. This has seen risk assets (equities) fly and gold sell-off.

A gold rout on the back of tightening US monetary policy is a fairly straightforward affair; but one which took its immediate catalyst from looser Japanese monetary policy is a bit more uncertain from where I’m sitting. The outlook for US monetary policy of course not at all favourable to gold, so my expectation would be for a continuation- there’s nothing but air below 1180- but we’ll have to wait and see.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s