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.

© 2009 Copyright Kevin George - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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