Gold Knocks Six Times on The Ceiling
The comments below are an edited and abridged synopsis of an article by Mike Shedlock
Gold has been putting in a strong performance. St. Louis Fed president John Bullard has helped by talking about too little inflation and the need for rate cuts.
Technically speaking, the $1,350 to $1,370 area has been a tough nut for gold to crack. On a weekly chart, gold has failed in this area five or six times, depending on how you count.
Gold is a hedge, but against what? Some view gold as an inflation hedge, but it isn’t. Gold is a hedge against the notion that the Fed has things under control.
Gold fell from $850 an ounce in 1980 to $262 an ounce in 1999 with inflation every step of the way. People believed that Alan Greenspan, Fed chairman and the great maestro, had everything under control. It was an illusion.
Faith in central banks is about to be tested again.