Dollar, Dow, & Gold @02/27/09
While the Dow had plunged 7000 points over the past year, Gold had been stucked in a $300 range & the Dollar had recovered 1800 points from historic lows.. with all three now at/near their M/T range extremes, the Dollar could benefit while Gold stay range-bound should equities stabilizes & consolidate near term from Dow's 12 year lows..
usdx monthly @022709The Dollar have additional support from USDX 80 after its recent correction.. sustained weekly & monthly break above 3 years highs suggests good odds for trend continuation up to the 88/92 mid-term levels..
euro @022709Euro was saved from going below 1.23 by Eur/Gbp, but the failure by the Cross to sustain a break over .90 plus extended weakness in Eur/Jpy may had snuffed out the bounces over the last 2 months.. Euro ending February below 1.27 increases the odds for trend continuation & retest of the 1.23/1.18 M/T zones.. Below 1.23 will tilt the odds for the January high to stay intact for the year..
gold @0022709M/T Gold had been contained in a $300 range contrary to the prevailing $1500+ expectations..
After touching 1000 last March, its M/T bias had been side to down in sympathy with the global equity markets.. the recent $150 rise from 850 may had been induced by the Dow's impulsive break below 8000.. near term consolidation by equities from Dow's 12 year lows could see more liquidation up here at the recent highs & range bound gold for a lot longer then most would expect..
posted by Gecko @3:33 PM
2 comments
2 Comments:
Just my humble opinion, but I would attribute the recent activity in gold as being driven by the ETFs. At present time, the insatiable demand for the yellow metal from these investment vehicles, far exceeds the availability of the physical assets. If there was ever a time when gold was ‘an accident ready to happen’, it seems to me there is no better moment, for we are finally at the threshold of such historic moment.
Although predicting the timing of when this bubble is about to burst may be as elusive as the gold inventories themselves, it is not unrealistic to expect that gold fever may come at a crash with reality when the 2k handle prints.
For now I would suggest enjoying the ride, and not by owning the ETFs or futures contracts; but, by owning the miners themselves (Barrick, Newmont, Goldcorp, Anglo, Kinross, Freeport, etc.)
Thank you for sharing your views.. yes, owning gold mines may be the way to invest in gold as it had not gone anywhere since touching $1000 last March & in 1980.. adjusted for inflation, the 2K handle should had been printed long ago..
We can speculate on what will happen in the future.. but price movement is the ultimate market truth as it represent what had happened, what is happening now, & with good applied analytics, what may happen in the future..
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