Replies to post #26532 on The Rising Influence of Rising Affluence

[santafe2]

I think the gold market is reflecting three trends. Gold moves up when the US$ is weak. The US$ is very strong at ~110. When Gold peaked in 2011 the US$ was at ~72. Gold moves up when inflation is moving up. As inflation is moderating, gold will move down. Gold moves up on fear. See the spike in gold when Russia invaded Ukraine. As the Western world has stepped up to support Ukraine they've begun to retake territory. Fear 2: See the spike in gold in the early months of the pandemic.

The three key drivers for gold are all currently working against it. As you can see from the chart below, gold is at a critical support level. I don't think this will hold. Taking a longer view I won't be surprised if gold moves back down to the 2018 low.