My guess is that the big run in gold in probably over for awhile. The run has been a function of the USD. If it can find just a little traction here then Gold will get whacked. Take it for what it's worth
Well I agree with half your statement that gold is a function of the USD. But cutting rates is inflationary for the USD, which is good for gold so I'm not following your reasoning here.
Daily Candle pattern.....as of today.... is an Evening Star. Very Bearish. Weekly bar is a Shooting Star ..... also bearish. I'd think at the "very least" there will be consolidation / trading range setting up. Plus there was huge volume on this down day. Just my 2 centavos here at the close.
I remember I was complaining about a dollar rally when the fed pumped in another $200 billion awhile back. I said it was counter-intuitve and I was told the fed was saving the economy. A few days later the dollar had given up all it's gains and was heading lower. Give it a few days and I bet gold will be at an alltime high, the dollar at a new low, and a faded stock market. Someone is either very irrational or the markets are outright rigged. Don't fight the trend of course but eventually fundamentals will triumph over manipulation.
Agency MBS swaps spreads verses Treasuries are really starting to come in a lot. This shows relief in the mortgage market as opposed to fear. In currency trading you need some catalyst to break the perception of the FX traders. If FNM and FRE can start buying up some toxic MBS and they can actually succeed in "un-seizing" the secondary mortgage market....this would good for the USD and bad for Gold. or not...we'll see
FX markets had a full basis point priced in. ALL the major currencies tanked pretty hard vs the dollar at the report. That is bearish for gold. Also, it was quite over bought anyway. I agree with previous posts here. It will go back up, but may take awhile. It all depends on the dollar.
Just wait until Fannie and Freddoe end up like Bear Sterns. Everything else is chicken shit compared to these two doomsday bombs. This is why the fed is in panic mode. If their MBS were marked to market, they would have negative shareholders' equity. Still, it's only a matter of time before their cash runs out. Too big to fail, too big to bail!!