Gold Is Pounding the US Dollar and So Can You

• Posted by Greg Harmon
• on July 15th, 2011

Thursday my friend J.C Parets over at All Star Charts wrote a great piece about how the Gold has a long way to go before being overvalued (link below) showing Gold and it relationship with Equities. It is not just in terms of Equities that Gold is looking higher. Back in March I wrote about a system to trade Gold against the US Dollar Index (link below). Reviewing that relationship today shows that it has broken out higher technically and is moving up. There are two charts below that illustrate this from the Futures and ETF perspective.

Gold, $GC_F, against US Dollar Index, $DX_F

Both charts show that Gold is breaking out higher from a symmetrical triangle after a run up. The bullish targets for each move are to 22.50 in the Futures and 8.10 in the ETF’s. The Relative Strength Index (RSI) for each chart shows it trending higher and the Moving Average Convergence Divergence (MACD) is moving higher after a cross up last week. Both support further upside. Neither is signaling a sell in the weekly chart yet according to the trading system so take this as an opportunity to trade the pair.

SPDR Gold Trust Shares, $GLD, against Power Shares DB US Dollar Index Bullish Fund, $UUP

J.C. Parets AllStarcharts

News Flash March 2001: Gold is Outperforming the Dollar

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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