Gold's Bull Market: A Closer Look
Jesse Colombo, known for his Bubble Bubble Report, has shared some intriguing insights about the behavior of gold over the past week. He noted that gold, priced in U.S. dollars, has paused its rally and is currently consolidating. This pause, however, isn't due to any inherent weakness in gold, but rather a rebound in the U.S. dollar. Interestingly, gold continues to rally when priced in most non-U.S. currencies.
Gold Futures and the U.S. Dollar
The chart below presents COMEX gold futures, which are priced in U.S. dollars. Over the past week, these futures have consolidated within a $50 range, between $2,650 and $2,700. This behavior is typical in a bull market, as gold takes a breather before potentially moving higher. A decisive breakout above the key $2,700 level would signal the next upward move. Furthermore, each dip in gold continues to be met with buying, indicating underlying strength.
The pause in gold's price over the past week was largely driven by the surging U.S. dollar. This surge was due to flight-to-safety capital flows following Iran's launch of over 180 ballistic missiles toward Israel and a stronger-than-expected U.S. jobs report. Gold and the U.S. dollar typically move inversely, with a stronger dollar usually putting downward pressure on gold. Despite the recent surge of the dollar, gold has managed to hold its ground, showing resilience.
Gold's Rally in Non-U.S. Currencies
What's particularly noteworthy is that gold's rally remains strong and uninterrupted when priced in most non-U.S. currencies. Monitoring gold priced in non-U.S. currencies is valuable as it removes the influence of dollar weakness or strength, showing whether gold is strong in its own right. For example, gold continues to hit fresh all-time highs when priced in euros, British pounds, and Swiss francs.
Gold priced in Australian dollars recently broke out and hit an all-time high. Australia is one of the world’s leading gold exporters, and its Perth Mint is renowned globally. Gold priced in Singapore dollars has also continued to show strong performance following its breakout a few weeks ago. This is significant because Singapore is a regional gold trading hub and is expected to become even more influential in the gold arena in the years ahead.
After nearly six months of wide-ranging fluctuations, driven by volatility in the Japanese yen, gold priced in yen has finally experienced a breakout. This emerging strength contradicts suggestions that gold's bull market is overextended and due for a sharp correction.
Bottom Line
These observations make it clear that while gold has paused in U.S. dollar terms, its strength in non-U.S. currencies reflects the ongoing momentum of this bull market. Gold’s resilience against the backdrop of a surging dollar and global economic uncertainty highlights its solid foundation. As we see breakouts across major currencies like the yen, euro, and Swiss franc, it becomes evident that the broader bull market for gold is far from over. This multi-currency perspective reinforces the view that gold still has room to run, with significant upside potential ahead.
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Gold's Bull Market: A Closer Look
Jesse Colombo, known for his Bubble Bubble Report, has shared some intriguing insights about the behavior of gold over the past week. He noted that gold, priced in U.S. dollars, has paused its rally and is currently consolidating. This pause, however, isn't due to any inherent weakness in gold, but rather a rebound in the U.S. dollar. Interestingly, gold continues to rally when priced in most non-U.S. currencies.
