Gold bulls have been retreating in earnest over the last two months. The rally in Gold (GLD), when compared to performance of a fundamentally stronger US Dollar (UUP), appears to have been more of a short-term cyclical event. As the US economy recovers on expectations of higher interest rates and a more business friendly environment under President Elect Trump’s administration, the Dollar will continue to punk Gold prices. The chart below speaks volumes on the sentiment within capital markets as longer term trends and patterns are not accidental and tend to reconfirm fundamentals.
Until the next financial crisis or recession that ushers in low to negative interest rates or grave geopolitical catastrophe threatening to upset the economic equilibrium within G20 economies, the cyclical outlook for GLD remains bearish.