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« Buying Opportunity In Gold Stocks | Main | The Canadian Dollar versus The US Dollar »

PPT Propping Up The USD Again?

PPT Propping Up The USD

It appears that the PPT has propped up the US dollar again as it rallied up 0.52% or 0.42 on the US dollar index. Gold prices didn't immediately react with a downturn as it remained steady in New York trading but we watched gold prices steadily fall in Hong Kong throughout last night to their currently level in London of $663.50.

Gold stocks were also hit badly as the HUI fell 3% or 10.22 points. So what's next for gold, gold stocks and the US dollar?

We didn't think that the USD would break through its key support at 80 on this attempt and if it did, the breakdown would be small and short lived. The PPT appear to have bought the dollar back up to 81.49 after they were no doubt panicked by the small dip down into the seventies. We were looking for the USD to move above 81.09, so it could make a higher high. However one swallow does not make a summer and the USD will need to make a higher low before any significant short term uptrend can be recognised.

But we are not here for the short term moves, although we do make short term trades, the real money is made in the big swings. In this case, we are investing for a big swing down in the US dollar and a big swing up in gold and gold stocks.

Still we always cover the short term situation as it is key to discovering new trading opportunities where we can make profits on a short term trade or find a place to purchase a position at a discounted price.

PPT Propping Up The USD Again

At the moment we see some weakness in the gold price in near term trading as gold prices have hit resistance at $686 twice and so have formed a double top. This suggests some downwards movement is due in gold over the next week or so but we stand by our prediction that a large rally will begin in gold and gold stocks at the end of the summer.

Gold stocks have been taking a bit of a battering and the Full STO suggest there may be more to come which we fully concur with.

PPT Propping Up The USD Again?

The HUI needs to consolidate slightly before the next move upwards so watch for the Bollinger Bands moving closer together as this will show that volatility is decreasing in preparation for the next rally.

The weakness may last a few weeks but by the end of the summer we should have put this behind us as we look towards to next major move upwards towards our gold target of $1000/ounce. You can keep informed on the gold market and updated on gold stocks by subscribing to The Gold Prices Newsletter completely free of charge.

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