The inverse correlation between the dollar currency and assets priced in dollars has been very strong the last couple months given the increased volatility of the dollar currency. The bounce in the greenback precipitated a 350-point drop in the Dow Jones and a $40 an ounce fall in gold prices. A good deal of our profits in gold have evaporated after only taking a very small portion off at $104 on the stalling in momentum. We looked for a holding of the rising trendline at $102 but that was not to be. The dollar had other ideas as it continues its bounce off support.
We now look for GLD to hold $100 as previous all-time highs were at $100.44. Once GLD holds and turns higher we will add to our position with the momentum. Stops remain at $97 still solidly locking in a nice profit even should the trade fail to materialize in our timeframe.
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