Gold (+1.13%) is rising today with the precious metal trading back near the $1300/oz level and within just a couple of bucks of its all-time high. The rise in the precious metal is consistent with a general risk-off theme which has seen stock markets move lower so far today.
Taking a very long term view and looking at monthly charts the close for May seemed to confirm a breakout above a falling trendline from the peak seen back in 2011 above the $1900/oz level.
A weekly chart reveals how the market broke out of downtrend during March and in retesting the trendline from above the market formed a higher low (HL). A move above 1295 would mark a higher high (HH) with 1337 - the high from the US election night - and 1374 possible areas to look out for resistance
Gold intermarket correlations
One of the biggest determinants on the price of Gold lately has been the US election and the new government policies for a fiscal expansion. This saw an initial knee jerk reaction higher in Gold and the Tnote reverse with the proposed stimulus expected to lead to higher rates in the US. From the election date in November until Trump took his position in the Oval office these two markets moved almost in lock-step, however recent months have seen a growing divergence with Gold leading the way higher.
Silver is another market closely that showed a high degree of correlation following the US election. The move higher in Silver was in fact stronger than that seen in Gold around the start of the year. The sell-off that started in April was also stronger in Silver, with Gold often lagging in these moves. More recently however Gold appears to have assumed a more prominent role and whilst the market is on the verge of breaking a 2017 high, Silver lies some 5% from its year-to-date peak
Another market that is highly correlate with Gold is the US dollar. Unlike with the Tnote and Silver however this is an inverse correlation - note the USDJPY axis is inverted on the RHS. Once more Gold is acting as the frontrunner in this relationship with the USDJPY lagging somewhat. Whilst the divergence here is smaller than in previous examples it is still one of the largest seen since the night of the US election.