A new year, a new high?

Happy new year and welcome to more of the same.

At the end of 2009, the dollar got a sudden boost from the prospect of lessening unemployment. That raised the specter of the Fed raising rates sooner than expected, and the dollar shifted into bullish mode.

But as of this past Friday, the unemployment numbers looked a bit worse and while still showing an improvement compared to a couple months ago, the dollar spiked down. It recovered pretty soon and then sagged into the close. So it could be that our sudden dollar bull has just as suddenly subsided.

So gold is looking strong as it tries to break above $1140. It may do that this week and the next stop is just under $1200. If that happens, the likelihood of new highs above $1227 may materialize, and we might be looking at the projected $1350 level.

On the other hand, be cautious at the $1200 level. If that doesn’t hold, and the dollar heads back up with conviction, we might get the C leg scenario. So this next move is critical. The next check-point in the calendar is end of January.

This entry was posted on 10/01/2010 at 04:30 pm and is filed under Gold. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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