-- Posted Friday, 27 March 2009 | | Source: GoldSeek.com
April Gold: Open= 940.0 High=936.7 Low=919.0 Last= 924.0 -16.0
Before today, the US dollar, over the past month, has retraced 61% of its gains over the past three months. After a week of consolidating between 83.80 and 84.75, the dollar broke out higher today, ending the day up 1.2%. Has the slide in the dollar simply been a classic retracement and now support has been discovered? It could appear to be that way.
The dollar rally caused a broad commodity market slump to end the week, with gold closing down $16 and energy prices off 3-6%. Economic conditions in the United States, and around the world, are still facing serious challenges. Although consumer spending bumped up another 0.2% in February, the savings rate is seen at 4.6%, showing that consumers are starting to keep some money in their pockets. It could be many months or longer before inflation can truly take hold and start to drive up prices.
Should gold bulls be worried then? No. Gold prices finished 2008 roughly even on the year, and was the best performing commodity in the markets year-on-year. Despite stocks markets plunging and commodity prices falling close to 70% in some sectors, gold still managed to hang tough. If we’ve seen the worst of this recession, in terms of dramatic layoffs and GDP slowing, and gold has managed to not only survive 2008 but has gained over $230 per ounce in the past 5 months, then there’s little to reason to think that the outlook has diminished. Believing the path of gold will be straight up because the Fed is printing oodles of paper is simply unrealistic though.
Until the global market believes that this recession is behind us, it is likely the dollar will remain relatively supported. Only when the economies improve in Europe and Asia can foreign investors feel more comfortable stepping away from the US dollar.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
Thomas Hartmann
Altavest Worldwide Trading, Inc.
800 994 9566 x109
949 488 0545 x109
Fax 949 488 7625
-- Posted Friday, 27 March 2009 | Digg This Article
| Source: GoldSeek.com
