1200 numbers are about to be totally discarded. IF this scenario I'm citing ends in a break out in the upside direction as depicted, I frankly think we are not seeing 1200ish numbers for a long, time, or even for ever.
If 1338 area holds, then we could see a correction: 1320 first one, 1288 second zone. Good opportunities for buying.
List of fundamentals backing this up:
- T-bonds vs GOLD correlation is done, bonds are not a competitor in this wealth preservation game.
- GOLD behavior has switched from currency to commodity.
- Yields (rates) rising in compensation are for GOLD , check history (e.g. 2003-2007)
- Dollar is weak, and will continue: twin deficits are worsening, tax cut for fiscal, trade is forcing the US to devalue dollar.
- Increasing , rate hikes won't help but rather will follow ( is lagging, rate hikes are lagging too).
- indexes are in a breakout situation to the upside. Expect good years to come for overall, gold , agriculture, oil , industrial metals, etc.
- GOVERNMENT SHUTDOWN. Watch out for the news. This could add more pressure to the mix.