Gold News

Swap Gold for Greenbacks

One's been going up. The other has not...
 
GOLD can't catch a bid, writes Greg Guenthner in Addison Wiggins' Daily Reckoning. And the US Dollar is staging a stealth rally that could send it sprinting toward its 2013 highs.
 
Welcome to trading in 2014...
 
I said a couple of weeks ago that if we see gold slip below $1280, a quick tumble back to its lows near $1200 was a very real possibility. I also said you should avoid the miners and the metal due to their downright terrible behavior.
 
Well, everything began to unravel quickly last week. Gold dropped nearly $30 Tuesday to $1263. That's far below the $1280 threshold. Traders took notice – and gold hasn't even enjoyed a relief rally since the selloff.
 
It finished lower every single day last week. While a relief rally isn't out of the question, I suspect it continues to push lower. Gold futures are less than 5% above their December lows just below $1200...
Meanwhile, the US Dollar Index is putting together a stealth rally that could quickly send it back above its January highs.
 
After leaking lower, greenbacks are beginning to make a move. The Dollar Index shot off its early May lows and has now trended higher for nearly three weeks...
 
Check out how the Dollar Index found a bottom at $79 – the same place it bottomed in late October. That's a solid foundation for a move higher...
Just a few weeks ago, many analysts were talking about a potential breakdown in the Dollar. But things aren't always as they first appear. Many times, the best trades are the ones you least expect.
 
The charts are telling us its time to trade your gold for greenbacks. That could make for a very interesting summer...

Publisher of Agora Financial, Addison Wiggin is also editorial director of The Daily Reckoning. He is the author, with Bill Bonner, of the international bestsellers Financial Reckoning Day and Empire of Debt, and best-selling author of The Demise of the Dollar.

Addison Wiggin articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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