December 9, 2020 - (Gold Market Wire) - The slingshot is still being developed, and we haven't cancelled it yet. We got a good move off the low and have exceeded the upper band at $1865, and now retraced back after being turned away by the 50-day moving average. As the chart shows, we have right leg of the slingshot coming into view and we like the risk reward for a spec long. The chart shows the big downdraft we just got, and we see that as a set up for a speculative move back up.

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The risk reward is there - but only for a contrarian spec. The market is still too choppy for anything else. But a 1.5% move lower in a fairly sharp downdraft gives us the chance to fade what is a sudden sell-off, probably on the back of a large market order. Its always worth remembering that Gold is a small market (regardless of what the Bugs say) and so large orders can have an outsized effect.

On a secondary note, Gold's recent sell-off happened in the face of US Dollar weakness. We are starting to believe that the reverse opportunity could be building. Right now the whole world, and we mean "everyone" believes the US Dollar is finished. We note the move to significant resistance vs. the Euro at 1.22. If ever there was a time for Dollar to make a rally against the recent trend, this is is. We are getting long the US Dollar here.

There is no longer any reason why the US Dollar and Gold cannot move together - they just have. Correlation models may not be all they are cracked up to be - especially in environments like this.