GOLD 0.51% $1,391.7 gold futures

will the us$ die soon?, page-2

  1. 69 Posts.
    Bill Cara (well worth reading) says:

    http://caracommunity.com/content/caras-commentary-community-chat-thursday-jul-2-2009

    [8:05am ET] While you would not know it from this morning’s trading (i.e., Dollar up and gold down a bit), technical analysts like Colin Twiggs are watching for a possible $USD break-down. I agree with the analysis and with the pivot points he gives in his regular reports. I have been anticipating a test of 79 on the $USD (which Twiggs accurately opines is really 78.50) and $1,000 for $GOLD.

    [Twiggs] Since the start of 2009, the relationship between gold and the US Dollar Index deviated from its normal course. When the dollar weakens, the dollar price of gold normally rises, and vice versa. Gold being more volatile than the greenback, however, rises proportionately higher than the dollar weakens — and falls proportionately lower. The relationship went awry in early 2009, with the first vertical line on the chart below marking the point at which the dollar started to strengthen while gold and silver were rallying. The deviation continued until the end of April, when the normal relationship resumed… The US Dollar Index is headed for a test of support at 78.50, while gold rises to test $1000/ounce. Breakout below support at 78.50, without a test of medium-term resistance at 83, would warn of a sharp fall in the dollar as the normal relationship reasserts itself. The target of 73 is calculated as 78 - ( 83 - 78 ).

    As you know, I was saying in the WIR that I expect it to be, for those who are holding gold and gold related equities, a good time, but for a short time. By that I mean that for the short-run, I do anticipate gold to find resistance at the 1000-1020 level, where the Fed will bring in the big ammunition, including help from the IMF, to knock it back, in a so-called “Dollar Stabilization” move, which ought to hold the $USD at the 78.50 technical support level and higher, at least for now.

    By year’s end, however, a $1,500/oz price of gold is not out of the question as the Great Reflation Program seems to be the flavor of choice among central bankers and the IMF.
 
watchlist Created with Sketch. Add GOLD (COMEX) to my watchlist
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.