As the Dollar Bottoms, Will Gold Drop?

There has been a whole lot of chatter about how gold is going to go down because the dollar may be bottoming.  We believe that there is a significant probability that the reflexive anti-gold/pro-dollar trade is wrong.  Gold has been in a bull market in all fiat currencies over the past 10 years, not just dollars. 

Here at Running of the Bulls we are  bullish

First, it looks like the dollar may be bottoming.

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In addition, gold has traded in the opposite direction of the dollar over the past few weeks.  But gold has generally gone down less than the dollar has gone up.

In fact, as the dollar bottoms, gold may be consolidating.

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The above chart looks like gold is drawing one of those wedge type chart things that gold has traced throughout its ascent over the past several years.

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I have no idea if gold is on the verge of breaking down or not. But until we see proof otherwise, the bull market in gold is still on, even if the dollar has bottomed.

 

Comments

[dieuwer]

Dollar may also be forming a bear-flag.
Besides, the USD chart is just a fancy inverse-euro-chart.

[Bear Stocks Report]

The more diversified XME seems like a good bet. It is in a solid uptrend, compared to GLD which has been moving down to sideways for the past 3 months.