Gold: New Record, Up and Out of Previous Range
February 21st, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Gold has broken out higher from the previous range, setting a new all time high. It has decisively breached both daily and intraday overhead resistance levels.
Oil is trying to stay over $100, but can’t manage for the moment.
With regard to the U.S. Dollar, downside pressure appears to be building. Daily USDX is forming a somewhat sloppy descending triangle. While it’s sloppy, the lower highs are the giveaway. With the recent moves on gold and oil, I don’t understand why we haven’t seen a commensurate downward move on the dollar. The inverse correlation is weaker sometimes. As a dollar bear, I’m not thrilled about that correlation breaking down with the USDX near all time lows. However, the intact descending triangle is a welcome development. Daily MACD on the USDX hasn’t yet crossed down, but it’s very close to doing so.
Via: Forbes / AP:
Gold surged to a record in aftermarket trading Wednesday after oil rallied above $100 a barrel and investors bet the Federal Reserve will again slash interest rates – boosting the metal’s appeal as a hedge against inflation.
Other precious metals traded mixed, with silver also touching a record-high and platinum retreating from historic levels.
Gold has risen more than 12 percent this year, driven mainly by oil’s ascent to $100 and steep declines in the U.S. dollar. Gold for April delivery jumped as high as $949.20 an ounce in electronic trading on the New York Mercantile Exchange – the highest ever and within striking distance of the psychologically important $1,000 barrier. Earlier Wednesday, gold settled $8 higher at $937.80.
“I would point to oil as the primary driver. Oil and gold seem to be in lockstep right now,” said Jon Nadler, senior analyst of Kitco Bullion Dealers Montreal.
Silver joined gold’s rally, shooting 33.2 cents higher late Wednesday to reach $17.84 an ounce for March delivery on the Nymex, after earlier touching a record $17.87. Silver ended the day 25.20 cents higher to settle at $17.760.
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