War with Iran, Euro rallies

Talk about a world of contradictions.

The Euro has resumed its rally and just as a rough guess could be headed to 1.30. It was due a relief bounce. That’s taking the wind out of Euro gold and dollar gold is following suit.

Contrast that with the sanctions against Iran Obama signed on July 1. Is that situation getting ugly? Maybe you never realized how ugly. Check this out:

http://www.globalresearch.ca/index.php?context=va&aid=20008

Now the big question is, will gold rally this month or drop further? Or both? Seasonal tendencies say a drop is likely, but you never know.

The Yen pairs are not showing a lot of risk appetite, that’s for sure. We could have a relief bounce in equities and the Euro this week, then another surge down. Or equities could ride a wave up for a while. For now, Euro up means gold down. And then things could explode in Iran.

Regardless, it seems that gold has not finished its up trend. Maybe there is some temporary weakness, but eventually it will get past $1250. The question is, can you survive until then? Looking at the daily chart, it looks like a trend change has started and that could mean $1150. At least that’s how the banks are painting the chart. But given the current state of the world, gold could turn around in a big hurry at any time.

It’s definitely time to put stops in place, if you haven’t done so already. Maybe not yet time to abandon ship, in terms of trading only (only the very brave and dedicated should be trading gold). This being gold, always be prepared for a vicious drop. If one happens, the good news is it’s a great buying opportunity.

This entry was posted on 06/07/2010 at 03:35 pm and is filed under Gold. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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