We’ve written quite a bit about the prospects for a Gold (NYSEARCA: GLD) rally in recent months.
The setups were there – and a rally has taken shape.
So what’s next? Will the rally run out of steam or continue higher?
One market indicator that we like to follow is the U.S. Dollar (NYSEARCA: UUP). And taking this one step further: the ratio of the U.S. Dollar to Gold. We highlighted this as an indicator to watch earlier this month. Below is an updated chart and analysis.
The Dollar is showing some weakness of late, and this is pushing the Dollar / Gold ratio lower. And providing a tailwind for Gold prices as they move higher.
As you can see in the Gold / Dollar ratio chart below, there is a potential double top in play at (1) with a breakdown at (2).
Two thumbs up for Gold if this ratio continues lower…
US Dollar / Gold Ratio Chart
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