Keeping an Eye on the Dollar, Gold

One thing I’ll be watching today is to see if gold forms a double bottom at these levels and bounces higher. It would be optimal for a gap down at the open, followed by a steady stream of buying during the later a.m. session into the afternoon. Watch the RSI line for a breakout of its downtrend to confirm a move up should that occur.

I’m keeping a particular eye on gold with that G-20 meeting coming up this weekend to see if I can find any clues to which way it’s going to move. Somebody, somewhere has to know something and it should start to show up in the charts soon if anything is really going to come out of the meeting.

The dollar’s chart is still very bullish and it doesn’t look like it’s going to stop, but should it stall here at a double top, that would likely be bullish for the overall market as they have been moving in an inverse relationship as of late. Just from my experience at looking at bullish momentum charts leads me to believe that this will continue to move up, but we have to be prepared for anything and not let what we think will happen interfere with our reactions to what is really going on.

Comments

[Rene Cohrt:]

Bear or bull is difficult to decide, conscerning gold. The solution of the currency and liquidity situation as presented in this crisis demand something dramatic to liquidate debt. The solution could be an allround devaluation of currencies around 90 % and a fixed goldprice at a least 10000 US-dollars per ounce even without reestablishing a new gold-standard system, but a reformed Bretton-Wood system.

2008 Nov 13 09:30 AM

[CLH:]

A small drop in the dollar and a pop in gold but longer term the dollar will continue up and gold either down or stuck at 700. Its deflation not inflation for a long time.

2008 Nov 13 09:34 AM

[Francis Sch...:]

We cannot buy the Deflation scenario sold by the Authorities. Billions have been injected both by the FED, the ECB and the UK. Monetary inflation always resul tin pice inflation whichever state the economy is in.

Having said this, we suspect the PPTeam to do whatever is requested to keep the Chinese, Japanese and other holders of US dollars and treasuries happy as long as possible.

Last week the Saudis bought $ 3,5 BILLION of Gold. Would they suspect something?

2008 Nov 13 01:44 PM

[Jeff Pierce:]

Do you have a link for that Saudi gold buy? I'd be interested in ready that.

2008 Nov 13 02:05 PM

[Smarty_Pants:]

Here's a link, but I'm not aware of the currency exchange rates involved.

www.gulfnews.com/busin...

Based on the article, it sounds more like private buying and not Saudi government buying.

2008 Nov 13 02:59 PM

[Jeff Pierce:]

Thansk s.pants.

Gold/Oil bounces right where it should have today and the Dollar reversed on cue. Gotta love technical analysis.

2008 Nov 13 07:38 PM

[goldis4ever:]

"Saudi Arabia buys $3.5bn of gold in two weeks"

arabianmoney.net/

2008 Nov 14 01:44 PM