FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
The monthly chart of Gold             is telling. The down trend line from the 2011 high has provided a bounce. We should expect this support to hold temporarily because of its long term significance. We have also pierced the lower b band, suggesting the market has swung to an extreme. However, the poor fundamentals of Gold             do not alter the downward trajectory.

Having not previously outlined these fundamentals before, I will do so now:

1) Gold's upside is capped in the face of a Dollar bull market, which is only just beginning.

2) Gold             is still crowded by perpetual bulls, who claim the fundamentals 'keep getting better', along with erroneous 'below cost of production' arguments.

3) The world is moving to electronic money - whether on the blockchain or by standard, ubiquitous plastic cards. I believe this dents Gold's fundamental use case. Gone are the days of traveling through borders with your life savings in compact form - we have airport scanners.

When Gold             rallies - and I believe a final low will form - it will be out of necessity, rather than speculation. This necessity will come from the public's desire to move money off-grid. The public is grumbling, dissatisfaction is growing, but people are not yet fearful of their governments. Thus, Gold             is not yet a save-haven in the eyes of the public.

Bounces should be sold. The monthly swing low at the 1237 area should act as resistance. A bounce to the 1260 area is possible but hopeful. I will look to see how this month closes. Should we close on the lows, that would suggest a more ominous scenario, with downward momentum accelerating and new lows likely.

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