Just when you thought it was safe to jump back in the pool the dollar bulls come alive and down goes gold in a major dump as the greenback squeeze and dollar bull calls coming from far and wide. I have to admit I was deked out some by golds bottoming action then up move and thought we had the possibility to at least hold the $1100 area but that looks to be a dicey proposition.
After a $120 dump on gold the spec longs are going to be very weakened and if there is any serious "intervention" to dump gold further then now is the time before it can gain some strength. There is alot of shorts who will take profits before year end which exasberates the problem. I am returning to my mid $1050 - $1075 call from a week back. It may still take several days to play out as once again gold is back up $9 overseas.
One important item is some of the juniors are holding in well and not getting totally wiped out as usual in a correction like today. That will bode well as major money can still be made mining at $1000 gold and $16 silver. Part of cause of this action was todays jobs numbers so called "disapointment" of 7000 more jobs lost. Are we talking McDonald's burger flippers here or what ?
On top of that Bernake claims no chance of interest rate hikes anytime soon yet more Fed related types are verbally warning they could go up sooner than expected. Yes we have heard that before too many times the past month with no effect but now it matters ? Unless it is a major move in one shot, a 25 basis point raise will have a short lived effect on the US dollar. There is too much paper out there and todays action is a sign of the "talking it up" effect by the FED to keep the dollar from tanking. Signs of desperation to me.
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