Gold futures appeared to have an excellent shot at making an all-time high above $1,033, but were rejected yet again. Gold managed to charge up to $1,025 last week and then trickled back below the critical $1,000 level.
This is a disappointing setup for the gold bulls as it is always a positive to see a market make new highs and follow-through. It is also troublesome that the dollar is forming a technical reversal and it could have some strength in the coming weeks. The equity markets also formed a reversal and even the crude oil market had a sharp drop.
You have to ask yourself whether the major trends in these markets are forming major reversals or this is just a normal correction. We won’t know that until it is over. I believe the dollar is due for a bounce, but the long-term fundamentals tell me the dollar will continue to erode in value. This will be supportive for gold and it should move higher over the long-term.