Gold Boxed In by Bitcoin?
June 19, 2017
Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.
Gold remains under some pressure and as we noted here on Friday spot gold has fallen to “The Box” marking the 50-62% retracement of the move from the lows in early May of $1215 to the highs two weeks ago when spot gold traded to $1298. The Box is bounded on the low side by $1245 and on the high side by $1255 and as we write spot gold is perfectly in the “middle” of that range, with the low thus far in Asian dealing of $1250. We have to suspect that there shall be stops just under $1250 and that when those stops are elected that the lower boundary of The Box shall be put to test.
With crude oil steady at best and with stock prices generally trading better, the propensity on the part of gold buyers to rush forward is muted at best. Further, gold mining shares seem unwilling and/or incapable of 3 taking the lead and until such time as the miners lead weakness is the greater likely future.
Finally, Bitcoin is a bit weaker and we are still of the mind that the peak for the crypto-currencies generally but for Bitcoin specifically was made seven trading sessions ago when Bitcoin rose to just over $2800 and then plunged sharply, tracing out a daily “reversal” to the downside and finishing what appears to us to have been a nearly text-book Fibonacci 5 wave pattern to the upside. However, just did the EUR noted above failed to forge a weekly reversal to the downside, so too did Bitcoin “fail,” for although Bitcoin closed lower on the week it did not close below the previous week’s lows. Thus now a broader, time consuming top shall have to evolve instead. We believe it shall bit it may take time.