By: Chris Wilkinson of Longleaftrading.com
The overall fundamental theme for gold is still bearish. With the dollar rallying and commodities being dollar denominated, all else being equal, the price of commodities should decrease. The market looks to be pricing in low inflation to come and gold is used as an inflationary hedge. This is a bearish fundamental factor.
What we saw last week was very opportunistic upward movement that is helping set up the much larger downward trend that I foresee coming. The cash injections from the ECB and China should be short lived as the market will once again see these central banking efforts will not have a large impact on global inflationary numbers. Let’s look at the charts to plan our trade.