Gold Currency Index Daily Chart Analysis
by Erik McCurdy, Prometheus Market Insight
The Gold Currency Index (GCI) is a composite of gold prices in the currencies of 10 of the largest economies in the world as defined by GDP. It is therefore currency independent, reflecting the intrinsic value of gold as an international currency itself.
The GCI closed sharply lower today, moving down to a new long-term low well below congestion support in the 31.90 area. Price behavior had been confined to a trading range between 31.90 and 33.80 during the past several months and the close well below the lower boundary of the trading range favors additional short-term weakness. Technical indicators are extremely bearish overall, strongly favoring a continuation of the downtrend from July.
- Bullish Scenario: A rebound and close above the previous short-term high at 33.12 would predict a move up to congestion resistance in the 33.80 area.
- Bearish Scenario: A close below current levels would reconfirm the downtrend from July and forecast additional losses.
The bearish scenario is highly likely (>80% probable).