Euro Gold Ratio Is a Canary

For weeks I’ve been telling my subscribers that something changed in the gold market. Since Donald Trump’s election there was a pretty clear pair trade between the U.S. dollar and gold.

And that trade was most manifested in the price of gold in euros.

During last summer gold experienced its worse (in terms of time) downtrend of the seven-year bear market.

But since bottoming in October it has rallied, albeit weakly. It is still mired in that bear market, gamely trying to push through the $1300 barrier. The important zone is the $1365-75 post-Brexit vote area.

And with Brexit very much up in the air at this point, despite the best efforts to project otherwise by The Davos Crowd and their political/media quislings, gold’s relative weakness is a real worry for long-suffering gold bulls.

The New Case for Gold
James Rickards
Best Price: $1.50
Buy New $5.98
(as of 10:55 EST – Details)

While the currently monthly chart is a mildly-bullish uptrend, and has been since December 2015, it is a counter-trend withing a broader bear market that has not finished.

But, we know all this. Nothing about gold has been interesting for months. Newmont Minng (NYSE:NEM) and Goldcorp (NYSE:GG) announced a huge merger the other day, funds are scrubbing gold from both their names and their portfolios, investors have lost all interest.

That is because the real story is not what’s happening in the U.S., and consequently the dollar, it is Europe.

And this is reflected in the euro.

As I said at the beginning, the election of Donald Trump created a very strong pair trade between the euro and gold. Since the October bottom, however, that trade is breaking down.

Look at the strength of the move by gold in euros since the October low. This is now challenging the 2018 high — a triple…

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