I’m back from holidays and the first thing I read is that the American dollar is about to decline (Gary Savage at Goldscents). Gary is usually pretty good at timing the markets and seeing the bigger changes in the market.
However, Rademski over at Sunshine Profits also has a great track record and he shows plenty of charts showing the Euro is at resistance and should decline from here, which would allow the US dollar to rise significantly. The macro picture in the Euroland bond market is also crap so that lends credence to the Euro decline story.
Not sure which is right at present so I am sitting in cash on the side lines. In the meantime two things of significance have occurred while I was away.
First, all the junior gold miners in Australia took off, so a lot of punters are beginning to think “double bottom” with gold hitting $1179 and $1190. The strength of these stocks has surprised me. They are now in short term overbought status.
But secondly, gold fell last night even with a falling American dollar. That tells me gold is weak, and will only need a little nudge from the short sellers in thin trade to run the stops at $1190.
Its anyone’s guess at the moment. The markets are on a knife edge. By the time the Santa clause rally is over next week we should know which way gold is headed.