A Fog of Uncertainty

• Posted by Robert Sinn
• on May 30th, 2012

While the chart of gold priced in US dollars ($GC_F $GLD) has turned rather ugly technically and is at risk of falling substantially should support in the low 1500s give way, the chart of gold priced in euros is a different story entirely. Since topping out above 1350 euros per ounce in late-August 2011, the gold/eur chart has been forming a large multi-month bull pennant:

 

Gold/$XEU:

The wild swings which gold has experienced during the last several weeks (multiple $30-40 intra-day whipsaws) is clear evidence of the battle being waged between strengthening global deflationary forces and gold’s allure as a safe haven asset as well as a currency alternative in the event that eurozone turmoil continues to grow. Gold investors & traders are likely to experience more action like we witnessed this morning until the market gains even the faintest amount of clarity from the current fog of uncertainty hanging over markets:

 

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