Yen Will Drag Gold Down

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Gold has been bouncing higher for a little more than a week, and my view is that, as it approaches its gap at $117.95, it will reverse lower. Whether it’ll reach the gap or not at all remains to be seen, but I’ve shorted it this morning with a stop at $118.

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Of aid to this trade would be a re-weakening of the Japanese Yen, which I also see as having topped (take note of broken trendline).

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This will all probably be decided no later than Thursday morning, when the market has a chance to absorb all the news from Japan’s central bank. That “event’ dominates an otherwise very quiet week.

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