Delayed reaction to the dollar rise yesterday
I don't put a lot of faith in intermarket relationships. For example, it is expected that if the dollar goes higher, gold goes lower.
Yesterday,that relationship did not stand true. The dollar rallied strongly, and gold closed higher. Go figure.
Today, may be a catch up day, however, as gold is tumbling lower. Currently, the price is down -$18.10 at $1284.19.
There is also little in the way of a flight into the safety of gold on trade war concerns. Perhaps the story can be, that if there is a trade war, growth would slow, and inflation would slow too.
It is sometimes hard to square all the stories and relationships.
What we can say, however, is that the technicals showed bearishness.
Looking at the daily chart above, the price of gold moved higher and tested the 200 day MA (green line in the chart). That MA is at $1307 today. The high yesterday extended to $1309 but backed off and closed at $1302. The sellers leaned near the MA level. PS that MA had stalled rallies at the end of May/early June too. That helped to give the sellers the upper hand.
The next key target on more selling comes in at $1273. The 38.2% of the move up from the December 2016 low and a lower trend line comes in around that level.
