Gold consolidated in a tight range between $1213 and $1226 all week. Prices resisted the strong Dollar as it surged Thursday and Friday.

Metals and Miners remain vulnerable going into next week. Silver looks like it may break lower from a small triangle pattern. Junior miners (GDXJ) will likely test its lower boundary.

Gold and the Euro share a strong correlation. The Euro broke down on Friday after a 2-month consolidation. Prices are oversold and are approaching support at the 200-week MA. If prices begin to firm, that could support gold.

The COT report continues to paint a bullish picture. Speculators add to the short side as commercial money covers. The setup is there for a short-covering bonanza – all we need is a spark.

I think we will see increased volatility next week. Gold needs to rally above $1226 and then $1228.50 to generate more upside. A sustained decline below $1212.50 would likely initiate another spike lower.

US DOLLAR WEEKLY

The dollar closed decisively above the 200-week MA as well as the 50% retracement level. I felt the January 2017 top (103.82) was a major 16-year peak, but if prices remain above the 200-week MA, then that hypothesis will need to be revisited.

US DOLLAR DAILY 

Prices rallied and closed sharply above the upper boundary. Progressive closes above 96.25 would establish a breakout and target the 98.00 level. The dollar would have to settle back below the upper boundary to imply a top and false breakout/bull-trap.

EURO DAILY 

The Euro and gold have been strongly correlated. Prices broke down from the consolidation pattern. The Euro needs to find support and reverse to boost gold prices.

EURO WEEKLY 

There is a lot of support on the weekly chart between 112 – 114, including the 200-week MA. If prices are going to bottom and reverse, they should do it here.

GOLD WEEKLY 

It looks like gold is beginning to resist the dollar. The dollar ended the week 1.32% higher and at new multi-month highs. Gold maintained the $1212.50 low and traded between $1213 – $1226 all week.

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