What's up with Gold?

As we commented on yesterday, you would think with all the turmoil in the European markets and the rumor mills in the US that Gold would be starting a major move higher. Just the opposite is happening as gold is retreating with the equity indexes. There appears to be three reasons that make sense as to why the weakness now:

1. The gold index fell below its 200 day moving average which triggers the "bots" algorithmic models to generate a sell signal. This is just piling on for the moment.
2. The US dollar is gaining strength as the Euro is getting crushed. Normally in most market time frames there typically is an inverse relationship between the price of gold and the price of the dollar. 
3. The last and most likely culprit for the move lower is the liquidity drain on Dollars that seems to have hit the banks in Europe. The Banks are selling gold and beginning to hoard cash until early next year where they will get a chance to reassess the situation in Europe.

The following chart is rather busy but it shows graphically the change in direction for each of the subject commodities. Also note that the upper box on the chart shows the Gold Mining index (XAU) as it relates to the price of gold and it is falling as well. Normally we would expect to see miners lead gold higher if gold is ready for a major move. 

So should we jump in now to ride the next up leg? Lets look at the RENKO chart for gold and see if it can give us a hint.

Looks like a wait and see. Hold your money.