Gold/Dollar Ratio Reaching A Critical Crossroads (GLD)

From Chris Kimble: Gold has been weaker than King Dollar the majority of the time since 2011 highs. Gold has been stronger than King Dollar since Christmas of last year. Which trend is going to be the key trend over the next few months?

Below looks at the Gold/US Dollar ratio over the past seven years and highlights that an important price pattern is taking place:

The Gold/US$ ratio has remained inside of the blue shaded channel for the past three years. The rally since last Christmas has the ratio testing the top of this channel and three other resistance lines came into play at (1). Since hitting the top of the channel and triple resistance, the ratio has turned lower (Dollar stronger than Gold) and broken below steep rising support at (2).

Gold bulls would get caution/concerning message should further weakness at (2).

Gold bulls want/need the ratio to breakout above quad resistance at (1), to send a quality bullish message.

The SPDR Gold Trust ETF (GLD) was trading at $122.85 per share on Monday morning, down $0.39 (-0.32%). Year-to-date, GLD has gained 12.08%, versus a 12.66% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 36 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of Kimble Charting Solutions.