"As I sit here (10:40pm PST) watching gold blow past $1713.5, up 61.8 since the futures market opened, I am just so glad that you reminded us that gold's one day downside reversal needed confirmation and follow through."

"Thanks bunches and have a great Monday,.

Eoin Treacy's view Thank you for your kind words. Gold surged this morning as central banks become increasingly active in the currency and fixed income markets and as investor confidence continues to deteriorate. Thursday's downside key reversal was a warning shot but so far little more than that.

The Dow/Gold ratio broke downwards once more on Friday, further emphasising gold's secular dominance over Wall Street. Following almost a decade long trend of outperformance, the required moves in the constituent instruments are getting to be quite larger. However, nothing has happened to question the potential for the ratio to return to the 5 area. In past cycles it has even overshot that level.

At this point, prices are becoming increasingly overextended relative to the 200-day MA. However, a clear downward dynamic, sustained for more than a day or two would be required to question the consistency of the advance since July.