Gold trading in 2015.We have seen the same transition in the Gold market where the “gold bugs” have been beaten down. The risk off trade is to the dollar, not gold. Gold is too volatile to be held as a risk hedge. Gold is held as a “Disaster Hedge” when there is a threat of war or some devastating economic turmoil.
The gold markets volume has changed dramatically changed this past year and we might see less participation on the individual investor side. If we have falling demand for gold in the derivatives market, it means would could see some extra price volatility in the daily ranges.
Watch for lack of commitment on the buyers side in the volatility. This means we could see a consolidation zone being followed by sell offs to new levels. If we were to see a continuation in direction with the $360 annual range, we might see tests to $780 range. Remember there is no rational sell off or real price to be attained and the price could sell off to even the $600 range or more if there is some type of capitulation or default in the derivatives markets. If there is then the upside would be to previous swing highs $1360, 1580 then 1800. (not likely)
Dollar Index trading in 2015
The dollar index has been our major focus in our proprietary fund this year. The dollar index has been the major influence on price action in the major pairs, index trading, Gold and Oil. There has been quite a bit of volatility with momentum to the upside working in favor of most trades, mixed with oil price adjustments that have hurt many USD trades as the economies of the oil producing countries have some what cratered.
The key to the next year will be in trading the Dollar index and the price levels of support and resistance. We are posting a long term chart with some upside targets. Remember markets don’t normally move straight up or down and we will of course see some pull backs as the “unknown’s come in to play”.
If we have a continuation of the present direction of the dollar index we are targeting 92.56 and 99.10 for major resistance. This could take many months and watch for some consolidation for an upside continuation to occur. The dollar index has plenty of buy side momentum and could continue for the next year at this rate. The five year decline from 2002 to 2007 and the ensuing 2 years of consolidation in a 4 point range from 2012 -2014 built enough pressure in the market to bring us up over 10 penny in 6 months. There seems to be no let up on the buyer side which could keep this direction.
The dollar index has broken above the 200MA on the monthly chart, also above the 28.2 retracement an has a clear path to new highs.
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