GOLD: Inverse movement to the US$ or a breakout?
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| Topic: Gold — November 26th, 2006
If we examine both the chart for gold and the US$ we can see that they are moving in opposite directions. Will the gold rally come to an end if the dollar snaps back?
A recovery by the dollar real or manipulated would put a slight dent in the progress of gold but would not put an end to gold’s rally, in our opinion.
Everyone and his dog knows that the dollar has a long way to go down before it will find its true value and like any pendulum it will probably swing right past its own equilibrium.
However it is worth taking a look at both of these charts and note the opposite behaviour of both the dollar and gold.
Our strategy is to continue to hold on to the investments that we have made and accumulate as and when the opportunity presents itself.
26 November 2006
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