Gold Vs Euro, A Story

The monthly chart updates the situation in gold vs euro and tells a little story.

You see, once upon a time millions of Knee Jerks came flying into gold in panicked response to a credit meltdown in the weaker components of their union.  The first of these monetary refugees created ‘fear gaps’ and the last of them, the unsustainable blow off top.  By then, the gold mini hysteria had gone global and gold – all those unhealthy holders in tow – was cooked for a coming bear market.

Now gold vs euro is in the finishing stages of what looks like an Inverted H&S bottom after poking down and closing the open gap in 2013.  The left side Shoulder did this and then the Head rammed down even deeper just to make sure.  Now we have Portugal and all those low quality bond yields that were until yesterday showing a clear lack of respect for risk management.

People never change. They herd, they over intellectualize and they take too much to heart what other people say, without realizing that other people have agendas.  Charts on the other hand, simply tell stories over time and space.  This one has an interesting story.