I totally agree with BillRay. This market just seems tired.... Why gold isn't reacting to dollar weakness is beyond me...
Yes, I'm also very disappointed in this run as well. We probably could have made it up to the 750 target if there wasn't so much physical supply that was dumped onto the market these past few weeks. The ECB sales really did the gold price in for now. I sold some june gold tonight and i'll look for at least 660 or so to cover. We could actually go lower down to 625-630 since the seasonals line up poorly for gold around this time of year.
Trade-Weighted U.S. Dollar Index Falls to Record Low ``We are around its cheapest level in decades,'' Sinche said. ``The market is about as negative about the dollar as it can possibly get.'' http://www.bloomberg.com/apps/news?pid=20601083&sid=ajNvK2X4Uqkc&refer=currency In my view, we are likely very close or right at a low in the USDX. Gold's barometer for the value of the Dollar still works. We are not breaking out in Gold, at least not yet. If the DX was going to break below 81 then gold should be well over 700 right now. This is simply not the case.
I agree with that - I am gradually less and less bearish USD. The only danger is that Fed screws it up again....
Me too. I'm a dollar bull, but I think we spike through 80 on the dollar index first, and then no follow through. Eventually we have to put an end to this ridiculous liquidity expansion. That, in my opinion, will see a long term gain in the buck. The fact that the civilian on the street even thinks the dollar is doomed reinforces my view. Its not about debt (US has less debt per GDP than Britain!). Liquidiy, liquity, liquidity.
Take a look at the 5-day USDX chart. There is clearly some buying or propping occuring right at 81.3. This very well could be the line in the sand by the powers at hand. The media may mumble about how good a weaker dollar is but in reality, a dollar crisis could reek havoc on the bond/treasury market. The fed needs some level of balance or else the bond pits would go bezerk.
DX is already starting to bottom out now it seems. EUR/GBP and Gold starting to backoff a bit. If the payroll figures surprise even the slightest, then I think the funds will begin to heavily liquidate the already crowded dollar short trade. This of course is likely to place significant selling pressure on the PMs. We shall see...
I want to see the opposite: crappy employment report, spike through DX lows, then reversal back up. That's the bottom to me. Just an opinion, not a prediction. I don't do predictions.