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« How Will Niagara Falls Fit Through a Garden Hose? | Main | Gold: Load Up On Any Weakness »
Thursday
Nov122009

USD Decline To Take Breather Before Breaching 75

USD Decline To Take Breather Before Breaching 75

Technical signals from the RSI, STO and MACD indicators suggest that the greenback’s decline will take a breather, for the next few trading sessions at least, before falling further to break a critical support at 75.

This temporary strength in the USD provides a good opportunity to get short on the greenback or get long on gold at a small discount. Taking such a position should return gains in the short and intermediate term, as well as over the long haul.

The USD has key support at 75, which it will break soon causing a sharp drop which will send gold towards $1200. Note on the chart below how sharply the USD broke down through 75 before in early 2008.

US Dollar Chart 75 Key Support

So if you haven’t got long on gold yet, an optimum time to get long will be over the next few trading sessions. Once you have a long position, hold on tight because its going to be a fast, knee jerking ride and $1200 will be upon us in no time!

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Reader Comments (3)

Personally, I'm waiting until after this month's options expiry before taking any further long positions in gold. The option writers are in the hole big time this month and they are not known for their generosity. I'd love to see them taken to the cleaners but they always manage to pull a rabbit out of the hat at the last minute. I actually sold a bunch of gold stock this week in anticipation of buying it back in two weeks at a substantial discount. I still have my core position so I really can't lose even if I'm wrong. We'll find out at the end of next week.

November 13, 2009 | Unregistered CommenterPaul Dransfield

For any of you guys who are wondering. The new Gold (and silver) Junior miners ETF just came out two days ago. The ticker is GDXJ. It is comprised of stock from 38 different junior Miners. It seems like gold will have to pull back sometime soon. The next pull back might be in about 2 weeks. I guess I know what my next investment is going to be: GDXJ.

November 13, 2009 | Unregistered CommenterScottinKorea

Gold decoupled from USD a few sessions ago.Actually today Mr USD is weaker than EUR an GBP so is gold. Previous sessions you could see both breaking up. So we are seeing flying pigs, no questions about, take care.

November 13, 2009 | Unregistered CommenterToni

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