Something interesting is happening with the U.S. dollar that may explain gold's profound weakness on Monday
On its monthly chart, the U.S. dollar just cleared its 200-month moving average, a huge technical milestone.
It's my view that this technical development in the dollar is likely what caused gold to sink on Monday. The die-hard goldbugs just don't believe the dollar rally is real. If reality is a bug -- the bug just hit the windshield.
If the breakout in the U.S. dollar sticks, it could spell more pain ahead for the precious metals complex, as a rising dollar usually poses a headwind for gold.
The dollar is overbought on the monthly chart -- but in a strong move like the dollar appears to be in the throes of, the dollar can sometimes stay overbought longer than most think possible.