Over the past week, our technical indicators have been showing signs of weakness in gold and silver soon, but the Fed made it clear at the end of the week that the entire debt market would be caught. This pulled the dollar down and gave the precious metals a boost; they closed strongly the week before the Easter holidays.We start with the latest 6-month chart of gold, in which we see it has been kept in check for most of the week by its resistance near $ 1,700. News of the latest Fed viciousness caused it to rise significantly above that level with an increase of $ 68 on Thursday. But the volume profile remains weak. Its MACD indicator shows it is very overbought and it is approaching a possible trendline target at $ 1,760 to $ 1,765. So it could reverse soon, maybe after a little more upswing.
Higher possible goal
The reasons for the apparently bizarre development in gold since the beginning of March are actually logical, at least in retrospect. Markets collapsed in early to mid-March, which also pulled gold and silver down, as was the case before the bailouts in 2008. Then the Fed came spectacularly to the rescue, making it clear this time that there are no restrictions on the masses of funding that it is willing to launch.