Gold, Don’t Believe the Hype
Commodities / Gold & Silver 2009 Oct 28, 2009 - 08:37 AM GMTBy: Kevin_George
The recent bounce in the U.S. dollar to the 1.4750s, has further highlighted the correlation of 'risk' assets to dollar weakness.
Despite all the hype surrounding gold, the precious metal has fallen with dollar strength to trade around $1030. The price action confirms the risk asset correlations and has given a strong confirmation that further gains in the U.S. dollar will fail to bring support for gold above the $1000 mark.
Gold’s move above $1000 was very identical to oil above $100 as the break of this significant level brought a rush of investment to futures and ETF funds. With futures positioning at extreme highs and ETF inflows now declining, further dollar strength and an acceptance of the deflation picture will put an end to the hysteria surrounding gold.
By Kevin George
I am an independent financial analyst and trader.
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