DOLLAR / GOLD Comment

Did anyone else notice yesterday (Th; 24 Mch) as Gold and Silver were soaring to new highs that the US Dollar had bottomed two days earlier on Tue. 22 Mch? The two had been fairly well correlated so either the dollar had to fail and make new lows or the gold (and silver albeit less directly tied to the $) had to fail and sell off inverse to the dollar rally. Since then the Dollar has made a higher high for the move off of the recent low (but it is in an area of near term resistance here in the mid 76 handle).

Originally posted by CosmicCitizen
Did anyone else notice yesterday (Th; 24 Mch) as Gold and Silver were soaring to new highs that the US Dollar had bottomed two days earlier on Tue. 22 Mch? The two had been fairly well correlated so either the dollar had to fail and make new lows or the gold (and silver albeit less directly tied to the $) had to fail and sell off inverse to the dollar rally. Since then the Dollar has made a higher high for the move off of the recent low (but it is in an area of near term resistance here in the mid 76 handle).

The dollar has been weakening for months in my view. I have not been tracking these things that closely but personally I'd be surprised if a meltdown happened this year. I wouldn't be if one happened next year. These things take time to happen.

The Federal Reserve will print as much money as they can get away with. However, the first time they slip up and print too much money it is pretty much over, because they have "no choice" but to print whatever number is needed to pay the debt load. Of course by doing this it guarantees a fairly permanent weakening of the US economy.

reply to post by civilchallenger

In the bigger picture the dollar did not collapse despite the big bailouts in 2008 because as the world;s reserve currency it still commanded a reflexive response as a go to or "flight to quality" currency. But as the money supply continues to grow and the money that banks have been hoarding starts to seep out the dollar has benefited less and less to crises around the world. Eventually it will be like bending a paper clip until it breaks....but that being said - for the better part of this week it has been rallying (and from a level that broke previous up trend lines). It is probably being manipulated to put some cold water on the metals for this round,,,,,,it buys them time but doesnt change the outcome.

I noticed.

But of course, you knew that.

Gold will continue to make new gains as the world central banks continue their little currency games.

coming soon will be the world wide acceptance of Gold being pegged at $1440.00 USD

with all individual currency creation over the globe to not exceed the USAs Fed/Treasury annual printing of new money at the rate of $1.44 trillion per year for 3 fiscal years for the present day Marks/Yen/Dinars/Rubels/Rupees/Pounds/Euros.... including all the currencies of the G-20...
that will be the 'package' that all central banks will agree upon at the monetary summit sometime in 2011-2012.


buy gold in the next June 2011 dip, that's when the forecasted QE3 will not be made operational and the Gold support of $1260.00 will be approached in a big sell off because of the non-QE3 policy.

until the Nov Dec time frame silver should fluxuate per usual... but even as the Gold goes down in June so will silver so buy-buy-buy
As afterward, when gold gets announced to be pegged at $1440.00 the silver will find its leveal at the past gold:silver ratio of 15:1....which translates to gold $1440.00 silver $96.00...

this will be your last chance to increase your future buying power...June 2011

reply to post by St Udio

I agree with the non-QE3 rationale for a correction in PMs led by gold down to the support zone of 1225-65 (Dec 2009 high - June 2010 high) but I dont believe that the will peg the price of gold to currencies in the area of the recent high (any supporting evidence or just a hunch??). It is more likely that they would have a new Bretton Woods agreement and stop the music at gold $2100~ish and either call in the gold or offer to buy it from the public at $100 over spot at $2200 and then stop trading at the Comex so spreaders couldnt close the gap and sellers cant hedge in the futures market and encourage people to cash in their gold at or equal to previous record prices even adjusted for inflation as an incentive. I am not so sure that they want silver to go to 15 or 16:1 (historical). Afterall when they came out with the gold and silver eagles they had them pegged at 50:1. At some point it will be economical to recover silver from used electronics (ie cell phones) especially by the chinese and that will start to increase the relative supply of silver from scrap (assuming digital photography doesnt lose popularity and we go back to silver backed film.

BTW, the dollar is a little firmer again this am.

The US Dollar broke out of a down Trend Line recently and stalled (close basis) in the mid 76 handle. It came back down found support and broke out of the sharper 15" TL stalled and retested the minor trend line breach and now is springing higher again (bullish action for the USD which should weigh on the PMs)....but I dont expect any big moves until the Jobs Report tomorrow morning,