Well the main factors for gold making new highs is mainly due to the week dollar, that is gold has been used as a safe haven + there is a large number of speculators that see no technical resistance in gold(the sky is the limit).
But it has had a nice long way up so as the dollar has had(the other way), so the correction is in order,taking profit in gold and short covering in $.
Similar shift from usd is seen in the move into stocks on the back of optimism about economical recovery. i think similar signs of moving out from $ is seen in treasuries. And the fast dollar weakening must trigger inflation in the US as well.
Quote:
Originally Posted by ForexGuy
I don't trade gold,
You assume USD shorts will move to cover, and that the move in gold is somehow tied to the dollar.
I don't trade the DOW.
If you have data that suggests the recent move in gold is somehow linked to an inflation fear I'd be interested to see it. But I don't think one has anything to do with the other.
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