Another look at gold in various currencies
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.