GOLD : A flight to safety, a ceiling, and the US DollarThe gold and dollar have been moving together for most of January. The uptrend that the dollar has been enjoying has been accompanied by the gold market rallying to the resistance level created last September/October.
It’s a interesting global situation whereby the collective equities markets are suffering across the board, currencies are devaluing, yet the dollar — by comparison — looks good, but the global credit contagion has people running to safety and thus to gold.
You mix that all up and that gives you the chart of gold and the dollar moving higher together.
This could be changing though. Gold has reached a ceiling that could put an end to this. Prices have reached an area where there is likely to be a shift in power from buyers to sellers - that’s if the level stays intact.
Gold is the market of paranoia. Fear and gold rally.
Heck, greed and gold rally too! This market is the psychological pulse of investors and traders.
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