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Gold: Is It Invincible?


US Dollar QE Repercussion Chart

Dollar Commentary

Loss of confidence in the dollar is accelerating and it effectively sits now on what amounts to a trap door. US debt downgraded by S&P was a big story. The bigger story is the performance of the dollar in comparison to gold! Gold is being elevated back to its ultimate currency status. I think it’s fair to almost say that it is gold that has really downgraded the dollar for months, and this downgrade continues with a fury.

US Dollar Ultimate Oscillator Chart

The USD has had a rough 12 months, losing in excess of 10%. Unfortunately, the policies of the United States Government for the foreseeable future are unchanged. I expect that policy to show itself in the performance of the dollar.

During protracted downtrends, I like to use the ultimate oscillator on my price charts. When a rollover in the oscillator occurs in conjunction with a shadow candle formation, odds favor a decline. This chart could alternately be labeled the “Trap Door Chart”. Technically, the picture is absolutely horrific.

It’s hard to believe the current placement of the ultimate oscillator now, considering how far the dollar is already down, yet it’s predicting still lower prices! My 2011 target on the currency remains $65. The projected time frame for the target price is November 2011, although a delay into February is possible.


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