Gold is correcting a bit from an overbought condition, but the light volume in SPDR Gold Shares (GLD) tells us this is just a pause.
The chart shows a strong pattern of higher highs, higher lows but is storing up energy for a run at the 200 ma (circ a 168). Further, there is a bullish W pattern that continues to play out, a target of $175 is a good objective.
Though inflation conditions are being ‘talked down’ in the media, the data continues to show us there is plenty of inflation around, and even if it stops rising, price levels will remain elevated for some time.
The dollar is showing some weakness as yields have fallen on the long end of the curve, which tells us gold will be an alternative to these other asset classes.