Gold price enthusiasts are wondering why the recent rally has suddenly lost its “mojo”. Some analysts worry about the GDXJ ETF portfolio rebalancing, and others are focused on the global stock markets rally.

That’s a seasonal chart for gold, courtesy of Dimitri Speck. While the headlines are full of news on North Korea and US GDP numbers, the main price drivers for gold rallies are much more mundane and cyclical.

Indian and Chinese dealer buying for various love trade festivals is responsible for the three biggest annual gold price rallies, and dealer stocking for one of them (Akha Teej) is now essentially completed.

So, gold takes a breather. It’s that simple.

I suggested that gold would be a buy for gamblers at $1265 – $1270 and the price has just arrived there.

Conservative investors should wait to see if gold trades down to $1240 before buying, but gamblers can take immediate action. Regardless, gold is generally well-supported here, and there is no reason for any investor to be concerned about the big picture health of the market.
 

The French election voting showed “centrist” Macron doing well, and the euro has surged higher.

There is also a huge ascending triangle pattern in play on that euro chart. The target of that pattern is about 113. A rally in the euro towards that level could help gold challenge the $1300 area again, and in the short term, it’s cushioning the gold price decline.

Double-click to enlarge this dollar versus yen chart.

The French election news combined with positive statements made about US tax reform has triggered a big “risk-on” global stock market surge.

That’s reflected in the dollar-yen price action, and it has added a bit more pressure to gold in addition to that caused by the seasonal softening of Indian dealer demand.

Silver bugs may be disappointed by the failure of the recent upside breakout, but a new and decent triangle is now in play.