Tuesday, December 5, 2006
After getting stopped out of our gold futures position at $649/oz this morning we've been taking a breather and watching the metal consolidate in the $645 range. It really boils down to the dollar resuming its slide in order to allow gold to rally further and that may not happen until we get further rate increase hints from the ECB President on Thursday and the U.S. labor market data on Friday. What has been remarkable about the dollar is its inability to mount any sort of meaningful rebound. This evening the Euro is down, but only by a mere 11 ticks, and that was about the size of the moves during the day today. Clearly the desire to short the dollar has become exhausted in the market for the time being, but we will keep our eyes peeled to 12/4 support at $1.3281 to see if a stronger will to dump Euros for dollars sets in, but for now the dollar is range-bound.