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Gold Strikes Out for Higher Ground

Whilst Bitcoin is making all the headlines as it hits the new all-time high of $5800, gold is quietly retrenching and striking out for higher levels itself.

The latest daily chart shows a strong rally from the $1,270 level last week and a rise above the 21-day EMA. This marker is known to be a high resistance point in an uptrend and an equally strong support in a downtrend.

Gold Daily Chart
Gold Daily Chart

The 14-day ADX marker indicates that gold has turned a corner, from a technical point of view.

A quick glance at the weekly chart shows confirmation of the positive trend on the daily chart.

Gold Weekly Chart
Gold Weekly Chart

You can clearly see the new rally after the last month’s downtrend. As with the daily chart, the 21-day EMA is a key. In the weekly chart, the EMA is a strong support.

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China, of course, is a massive part of the gold market. Chinese gold premiums are rising, and as the Chinese Golden Week holiday ends, this is usually a bullish time for gold. The approach of the holiday and the actual holiday itself may well be partly responsible for the recent weakness in gold.

At the same time, the US stock market remains at record highs. This, despite the recent lower than expected economic data, including the 33,000 decline in payrolls for September. This was the first decline in seven years. The recent hurricanes, Harvey and Irma, are cited as the reason that the markets ignored this news.

The US continues on its path of nationalistic and isolationist programs, which only serve to undermine its economy. The US dollar will decline even further than it has in recent months, and the US will carry on losing trade to its rivals. This cycle of events looks set to continue indefinitely.

Janet Yellen is about to be replaced as chairman of the US Fed, and the favorite at the moment is Kevin Warsh. Wash is an inflation man, this is not likely to be good news for gold. The Fed will be watching what happens in Europe, China, and Russia for signs of an attack on the dollar. It will also be aware that there is a coming pensions crisis, with uncontrollable debt as a background as well. Inflation lurks in the background as an option for the Fed.

Geopolitically, North Korea, of course, and now the recent events in Spain, with Catalonia threatening to break apart as an independent state within the heart of the European “superstate” are just two of the major political concerns.

As usual, precious metals investors should keep one eye on the charts, and the other on the news. The market remains volatile and unpredictable.

Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.

This article was originally posted on FX Empire

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