Wednesday, December 6, 2006
We've been out of gold futures since being stopped out earlier in the week at $649, but with dollar benign economic data this week, including a fairly firm ADP employment report this morning, gold has been hammered - even with just a small dip in the Euro vs the dollar. We're on our way to potential retests of $635 and $632 in gold. But EURUSD is still at $1.3353, so we did not short gold due to a lack of potent upward dollar conviction - meaning we are getting ready for another great gold buying opportunity at some point soon - perhaps with Friday's economic data? We can't know for sure, but we know that it will come when the dollar resumes its slide. The dollar continues to be unable to stage a strong rebound which keeps us dollar bearish and gold bullish, in spite of the gold volatility.