Some people were claiming that the yesterday's Italian referendum could trigger another financial meltdown. Well, the Italian people said NO to Mr. Renzi's government but the markets...ignored it. Today the Euro is going up, the US dollar is going down and...gold is going down as well.
I guess gold bugs may feel disappointed. As usually, no matter what is going on the gold is going down. However, in my opinion, today gold and the US dollar are drawing a nice picture for the risk-averse investors. Simply put, it looks like an interesting short -term buying opportunity is in the making. Look at these two charts:
1. The first chart shows the current price action of the US dollar:
The US dollar is breaking down from a short-term consolidation.
2. Now the second chart. This time it is a well-known silver / gold ratio:
Since late November the ratio has been in its upward trend.
I think that the charts above create an explosive short - term pattern for higher gold prices.