“Gold is attempting to break from a 3-year falling channel and the SPY/Gold ratio is attempting to do the same thing. Gold and the SPY/Gold ratio need to move higher to prove that a trend change is actually in play,” notes Chris Kimble of Kimble Charting Solutions.
SNB’s decision is stoking speculation that the franc’s rally could spark a commodities countertrend that would ignite a raft of short covering across the commodities complex.
Gold’s recent bullishness, impressively, comes against the backdrop of a strong dollar. The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) rose two-thirds of a percent last week to its highest levels since July 2010.
SPDR Gold Shares
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.