The dollar is strengthening, but gold isn’t responding with the usual bearish price action.
The dollar has rallied from its day 31 daily cycle low and is approaching resistance at 102.50. Normally, renewed dollar strength could place additional pressure on gold. But gold’s recent price behavior suggests that selling pressure may be easing.
Gold remains in a daily downtrend, having declined into the timing band for a daily cycle low. Following the recent break lower, gold is beginning to stabilize. Gold formed a daily swing low on Tuesday, However, gold has not yet signaled its DCL. A close above the 10 day MA would provide the evidence needed to signal a new daily cycle.
What to Watch
The dollar is approaching 102.50 resistance while gold is showing early signs of stabilization. If gold continues to hold up despite further dollar strength, that would suggest a potential change in character. Alternatively, renewed selling in gold would challenge the developing interpretation. For now, gold remains in a daily downtrend. But its response to dollar strength is becoming increasingly interesting. The next move should help determine whether gold can complete the signal for its daily cycle low.
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