Category: Business Finance
The big driver impacting the precious metals market this past week has been the US dollar. We have been watching this converging wedge formation in the dollar index, a measure of the US dollar versus a basket of foreign currencies, for several months, and this past week the formation broke higher in favor of the dollar .
From a technical observation, gold is now directly meeting with its rising linear trendline.
We are continuing to see more evidence that the advance that is ahead of us across the precious metals complex will be a worldwide phenomenon, and not a US dollar-primary event as was seen in the bull market of the 1970's.
Gold has just made its second attempt within the last five weeks at breaking through its long-term downtrend (see long-term charts on the previous article, available here), and this opportunity once again proved unsuccessful. This price action increases the validity of the resistance shown by the trend line and its importance as a technical data point. Gold is going to have to prove it can overcome this level for the next leg of the bull market to commence.