mubirasymbu's  Instablog

See chart:

Whenever gold reaches new heights, you keep hearing people calling it a bubble. And they have been doing that for years.  But all bubbles demonstrate unsustainable price patterns.  Let's take a look at the Nasdaq tech bubble and see how it is compared to the current gold price patterns.  First, a Nasdaq monthly chart: First, Next, the current gold price chart:
 
As you can see, the kind of ascending flag pattern associated with irrational exhuberance has not emerged yet.  Gold cannot be in a bubble.  (Charts are from stockcharts.com)

I think trades work best when fundamentals and technicals confirm each other.  For all the sovereign debt problems in Europe, it might be reasonable to believe that the euro is in a much weaker position than the dollar, but it is not clear if we look at the long-term (monthly) price actions:


As can be seen in the chart (plotted with stockcharts.com), euro broke out of a downward channel in April and has hardly traded outside of that wide candlestick ever since.  Moroever, RSi has remained above 50.  And there has been a bullish divergence between price (lower lows) and the MACD histogram indicator (higher lows). 

While I expect the euro to continue to pull back from here--and the dollar to rise against it, euro doesn't seem to be in a long-term bearish trend.