Note the significance of the 78.40 level on the DXY again with the close today. The weekly inverted head and shoulders pattern on gold is still valid heading into the most seasonally bullish period. A firm weekly close tomorrow would suggest an imminent breakout over $1000. Look for a rotation out of financial assets into hard assets as confirmation of this trend.
Unless the strong inverse correlation between the USD and the stock market breaks down, I don't see this. Everyone knows this rally is ready for a pause, at the least, and when that happens, if this correlation holds, the USD will go higher, and that almost always means that gold will go lower. It's more likely we see 850 before we see 1050. On the USD, a break over the long time crucial 80 line is more likely than a run to below 76. Both over the medium term, which, full disclosure, I don't trade.
iif everybody start liquidating equities and go to cash to pay mutual/hedge fund redemptions than USD could get another spike. the bankruptcy of lehman led to many hedge funds force to liquidate portfolios etc. and with bank stocks collapsing investors sold off bank stocks on margin call or jus stops...you got to remember mutual funds sell after 8% decline in price as a rule. stocks are just paper..it's not even about being a shareholder or investor...stocks have no intrinsic value.. the value of the stock if price drops,,,funds just sell regardless....who cares just sell no point in owning it. no point in owning stocks if there is no price appreciation and no dividends. with bonds you don't risk losing like 50% of value as in stocks in weeks...bonds are liquid too...with stock it's not even liquid in cases. you put a market order no takers. stocks are riskier than bonds. the smart ones were smart to unload C at $40/share. C won't see $50 for decades or ever again... eventually the company might broken up and sold in parts. as for lehman and bear stearn shareholdes the lucky ones bail out early ..no point in sticking around holding pieces or worthless paper that 10 cents to the dollar or less buy and hold just isn't worth it for stocks unless you have large stake like 51% of the company. for the rest of the small shareholders just bail if you see smoke.