David Fuller's view My last review of gold in many different currencies was on Tuesday 12th June 2012. Much of what I said on that date still applies but an update is merited by this week's upside breakout for gold in USD (weekly & daily).


Fullermoney has long contended that gold's best moves occurred when it was widely viewed as a monetary metal and appreciating against all fiat currencies. So, looking at 5-year weekly charts, how is the yellow metal doing today against some of the stronger currency indices and individual currencies? Versus the relatively firm Asian Dollar Index, gold has held above previous support and recently broken upwards from the lower side of its trading range. A move beneath this pattern's lows would be required to reverse current scope for a further rally towards the upper side of this range. This recovery within the range is further advanced against Dollar Index and the Latin American Dollar Index.

In June, gold's recovery potential looked least convincing against firmer currencies such as the Japanese yen, Chinese renminbi, Singapore, Australian, New Zealand and Canadian dollars. Indeed, is slipped lower against this group, particularly versus AUD and NZD. Consequently these patterns remain less convincing; the recent lows need to hold and further recoveries are required to confirm support near the range lows.

Not surprisingly, gold has been considerably firmer against the soft euro and Swiss franc since it was pegged to the single currency. Gold is near the upper side of its range against these two currencies and a sharp reaction would be required to offset current scope for a further test of the upper boundary and quite possibly upside breakouts before yearend. The same can be said for gold in South African Rand.

Bullion looks strongest against the currencies of emerging market giants Brazil and India as it is extending its upward breaks from the previous trading ranges.

The only factor capable of preventing further gains for gold against all of these fiat currencies over the next year or more, in my opinion, would be a stock market slump of cyclical bear market proportions. I think that is unlikely for at least the remainder of this year, provided that we do not see a significant spike in the price of crude oil.