I have long held that gold would be driven by USD/JPY, and at the start of this calendar year, it was looking very promising for gold, because the US dollar (one kind of toilet paper) was becoming more worthless than the Japanese Yen (another kind of toilet paper). I’ve marked this point with a green arrow. However, the US toilet paper has appreciated handsomely against the Japanese variety, so much so that a bullish breakout has transpired (green circle).
Consequently, precious metals – – which have sucked out loud since August 6th of last year – – could be in for yet more trouble. The red arrow below marks the start of the year, which is when gold seemed like it could fulfill the promise of its bullish saucer pattern. Instead, we have fumbled and stumbled lower, threatening at times to penetrate that saucer pattern. Should we do so, well, I think gold’s goose is cooked.