Touts for Wednesday have gone out ahead of Yom Kippur, the Jewish Day of Atonement that begins this evening at sunset. In observance of this holiest of days on the Hebrew calendar, I will not be in the chat room on Wednesday. However, I will put out a short guidance for Thursday when Yom Kippur officially ends tomorrow at sunset. Traditionally, it is a day of fasting and prayer for Jews, who customarily leave each other with the salutation, “May you have an easy fast!” And a happy, healthy and prosperous New Year (5777) to all, as well.
A Holiday Note on the Eve of Yom Kippur
- October 12, 2016, 10:38 am
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October 12, 2016, 10:11 am
Best of the holidays to you Rick. I only wanted to drop a quick line with a mention of gold. In this case, as it relates to the Yen / dollar to which it is tied at the hip lately. Yesterday on the hourly chart I might have sworn that a minor double bottom was being formed that would send Yen higher however today that pattern did not carry through and instead what has developed is a bear flag suggesting a continuation pattern and further declines. If that is so it bodes ill for gold over the very near term and further declines should therefore be expected in both miners and metals.
Indeed, platinum seems to suggest that the bottom has not yet been found as today it took out the key support at 950 having retraced almost 70% of its total move this year that peaked in August near 1200 dollars. Platinum often leads gold down so this is always worth keeping an eye on.
That kind of fall strikes me as an astonishing decline if this is truly a precious metals bull market and at this point a complete retrace back to the starting point for platinum is no longer out of the question. So what is that saying about gold? That it may bounce but then resume its decline?
So the near term drama may all be coming down to what the Yen does in the next few days as the correlation between the precious metals sector (primarily gold) and the Yen is quite close.
A continuation pattern suggesting a further decline for Yen is therefore a negative for the prospects of a quick gold recovery despite the oversold conditions of metals and miners. Currently this is a topic of considerable debate as the majority seem to believe that gold has fallen enough and is primed to bounce immediately.
I am not so sure. Lets just watch the Yen for clues.
No sooner did I write the prior post and Yen broke down from its wedge pattern with platinum immediately responding by falling another 6 dollars. Both gold and silver also weakened. I love this pair the way they move in sync some days. Yen has now dropped below .96 and threatens to go much lower before it hits important support and thus the prospects for an immediate gold bounce now appear remote. Personally I am looking for Yen to fall to .around 90 in the coming days although only the Gods can know if that is where it will stop.