Courtesy of Chris Kimble.
Below looks at the US Dollar/Gold Ratio over the past 30-years. When the ratio is heading lower, US$ is weaker than Gold/Gold stronger than US$. When the ratio is heading higher, US$ is stronger than Gold/Gold weaker than the US$
At this time, the ratio in the chart below, has created a Power of the Pattern setup, that is seldom if ever seen.
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A rare cluster of resistance is in play for the US$/Gold ratio at (1). Resistance is resistance until broken. If this resistance would hold and the ratio would turn lower, Gold could blast off, which would benefit Gold, Silver and Mining stocks!
What do Gold, Silver and Mining bulls NOT want to see happen? If the cluster of resistance is taken out to the upside (US$ stronger than Gold), metals could get crushed!
The Power of the Pattern would say this is not your usual test of resistance and what happens at (1), will tells us a ton about the correct metals trade going forward. If you are interested in Power of the Pattern ideas applied to the metals market, we would be honored if you were a Premium or Metals members.
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