Thursday, July 25, 2013
Down goes the Dollar; Up goes Gold
Gold was firm for the entirety of today's New York session after encountering a round of selling in Asian trade last evening. Additional downside momentum was seen following on the heels of yesterday's retreat from chart resistance but dip buyers moved in above psychological round number support at $1300, never allowing it to test that level.
If we wanted to see whether or not those dip buyers were going to make their appearance in Asia, we got our answer.
The market dipped down to as low as $1308 and then moved quickly higher last evening with the buying continuing at a steady pace into Europe and New York.
Late this afternoon, and I am still unclear as to what the exact reason for the sharp selloff was, the US Dollar came under rather intense selling pressure, in spite of the fact that interest rates had been rising for most of the session. The Yen, the Euro, the Aussie, the Swissie, it did not matter - all of them shot upward in a fashion that was reminiscent of their performance that day earlier this month when Bernanke gave his now famous comment about QE continuing "for the foreseeable future". I must have missed some comment from some Fed governor or something but either way, something lit a fire under the Dollar bears.
As the Dollar imploded lower, gold caught another gust of wind and jumped with the result that the metal put in a $30 range from top to bottom and now goes into Asian trade with upside momentum, the exact opposite of yesterday's status! As I said yesterday:
"She loves me; She loves me not; She loves me; She loves me not".
Here we go again.
While the HUI was up, it's performance was rather lackluster given the sharp thrust higher in the metal.
Now we face the Friday Follies once more to see whether or not gold gets its usual beating on that day or if it can mount a counter rally. For the metal to generate some further upside, $1350 needs to be cleared.
By the way, take a look at the following 2 hour composite chart I put together comparing the price action in gold to that of the US Dollar... Can you say the words. " MIRROR IMAGE IN REVERSE"?
Note that as the Dollar gets whalloped, gold shoots higher. Gold is back to acting as the ANTI-DOLLAR.
If we wanted to see whether or not those dip buyers were going to make their appearance in Asia, we got our answer.
The market dipped down to as low as $1308 and then moved quickly higher last evening with the buying continuing at a steady pace into Europe and New York.
Late this afternoon, and I am still unclear as to what the exact reason for the sharp selloff was, the US Dollar came under rather intense selling pressure, in spite of the fact that interest rates had been rising for most of the session. The Yen, the Euro, the Aussie, the Swissie, it did not matter - all of them shot upward in a fashion that was reminiscent of their performance that day earlier this month when Bernanke gave his now famous comment about QE continuing "for the foreseeable future". I must have missed some comment from some Fed governor or something but either way, something lit a fire under the Dollar bears.
As the Dollar imploded lower, gold caught another gust of wind and jumped with the result that the metal put in a $30 range from top to bottom and now goes into Asian trade with upside momentum, the exact opposite of yesterday's status! As I said yesterday:
"She loves me; She loves me not; She loves me; She loves me not".
Here we go again.
While the HUI was up, it's performance was rather lackluster given the sharp thrust higher in the metal.
Now we face the Friday Follies once more to see whether or not gold gets its usual beating on that day or if it can mount a counter rally. For the metal to generate some further upside, $1350 needs to be cleared.
By the way, take a look at the following 2 hour composite chart I put together comparing the price action in gold to that of the US Dollar... Can you say the words. " MIRROR IMAGE IN REVERSE"?
Note that as the Dollar gets whalloped, gold shoots higher. Gold is back to acting as the ANTI-DOLLAR.
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