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« Gold Up $14.40 to $1006.10/oz | Main | Kinross Gold Corporation Could Up Gold Production by 57% in 5 Years »

Gold Prices Capped by Stubborn Dollar

USD Chart 30 September 2009.JPG

A snap shot of the dollar over the last few days, going sideways and trying to consolidate. This action, along with a number of pundits calling for dollar rally has helped to put a cap on gold prices.

The chart below takes a longer view of the dollar and is overlaid with golds progress. It clearly demonstrates the inverse relationship that exits between the dollar and gold. Gold and indirectly silver are reflecting the dollars behaviour so we need look no further for now.

USD Chart with gold 30 Septemebr 2009.JPG

However the time will come when gold will be recognized by many more investors and will rise regardless of the dollars progress. When this becomes apparent the general public will begin to take a keen interest and that will signal the beginning of the mania period whereby both gold and silver head north in leaps and bounds. At this point even the dogs with fleas in this sector will experience unheard of price rises as the masses buy anything that resembles the real thing.

However, quality always shines through and those who hold the quality stocks will do the best.

Have a good one.

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Reader Comments (2)

Hi Y'ALL Gold Bugs & Silver Bugs.
I used to get frustrated when gold/silver went down when I wanted it to go up. Now I no longer get frustrated.Why??

Somebody told me about GLL the gold short fund and ZSL the silver short fund. I bought some. Now I make money when gold/silver go down.

When those funds go down I know it is time to be back in gold/silver stocks.

September 30, 2009 | Unregistered CommenterJohn Kozon

There are a number of people predicting another market crash, similar or even bigger than experienced in 2008. What are your thoughts on this and do you think that Gold and Gold stocks will fall with everything else, as they did in 2008? If not, why would this year be different?

Ash Miles.

September 30, 2009 | Unregistered CommenterAsh Miles

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