Ing: “The U.S. jobs numbers hit the gold market and it has now broken $1,200 to the downside. It looks as if gold will retest that $1,180 level, which has been an all-important support point….
“At the same time, the U.S. Dollar Index is trading well above 86 and that has been the major reason for the weakness in gold and the disappointment in gold mining shares.
However, when you look at the strength in the U.S. dollar in technical terms, it is not only overbought, but technicians might note that it is way overextended as far as its relative strength and way above the Bollinger Band. If we look back at 2002, every time the U.S. dollar went above its Bollinger Band, and I believe that happened five times since then, it has quickly reversed itself and gone back to normal.
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