One of the key indicators I'm watching in this market is the Euro (in addition to bonds TLT, discussed here). I prefer to use the CurrencyShares Euro Trust (NYSEARCA:FXE) because it it is very liquid in both the underlying and its options.
The key here is that many hedge funds and institutions have "short Euro" plays on. When/if these begin to unwind or get reversed to the upside, we will see Euro buying and selling in assets such as Gold.
Recently the FXE has shown signs of life, see the chart below.
FXE Daily Chart
You can see the downtrend in place on the Daily chart since December 2009. However, we see some indications that the bounce in the Euro may have some legs. Percent R has crossed into clear bullish territory above 80 for the first time in this downtrend. Also, we are now 2 trading days above the 40 day exponential moving average (purple line). Previous rally attempts failed at this trendline and reversed lower, with a 1 day blip above in April. Closing above that ma today should be considered a confirmation, and the 40 day and 20 day exp moving averages should now act as support on pullbacks. They lie around 124 and 123 currently.
Disclosure: No positions.