Sellers Sabotage Gold's Celebration
Source: GoldSeek, Rick Ackerman (6/8/09)
"Now, with Friday's rally, the dollar warrants even closer scrutiny. . ."
Some attributed the selloff to disappointment over gold's inability to push above $1,000 last week after hovering briefly above $990. We must confess to have been somewhat disappointed ourselves, since we had predicted a surge to at least $1,008, followed by a quick consolidation, then a follow-through to $1,066. Now it looks like we'll have to wait. But for how long?
Our suspicion is that the sellers got some help from Friends on High. Although we're not big on conspiracy theories, it seems doubtful that disappointment alone could have accounted for the drubbing bullion received on Friday as it revved up for a move past $1,000 that had seemed a foregone conclusion. It felt more like a shot across the bow—a warning to any speculators who fancy themselves getting rich effortlessly as they dance on the dollar's grave.
The U.S. Dollar Index recorded its biggest one-day leap in months, rising 1.24 points to end the day at 80.67. We can't say we were surprised by this, even if gold's weakness caught us unawares. Rick's Picks has been tracking the NYBOT Dollar Index dollar very closely since May 29, when it broke beneath a key Hidden Pivot support at 80.04. That appeared to contradict our deflationary scenario of a strengthening dollar, a globally unexpected event that would have the effect of putting many debtors deeper in the hole.
Now, with Friday's rally, the dollar warrants even closer scrutiny, since an emerging, bullish trend could have grave implications for all who owe dollars. We'd need to see one more push, however, before we infer that a major trend reversal might be in the works. Specifically, the Dollar Index will need to hit 81.43 by Tuesday.