Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Thursday, February 14, 2008

Does Yen Weakness Auger Poorly for Gold?

If you've been reading this blog or my premium service issues, you know I’ve turned short-term bearish on gold. I’m keeping an eye on oil, because one thing that would change my mind is if oil rallies hard again.

However, adding fuel to the bearish case is the action in the yen. Take a look and see if you agree …

This is only a daily chart, not a weekly chart. So how does this relate to gold? Look at this next chart …
In the past year, gold has moved closely aligned with the yen. If that trend continues, then a pullback in the yen could signal further price weakness for gold.

Mind you, I believe this is only short-term weakness, and potentially a great buying opportunity.


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