Gold Starts Off New Year With Gains

The start of 2010 trading has not been kind to the U.S. dollar, which has pushed up both oil and gold. As I write this post, spot gold's at US$1,117.00.

A Wall Street Journal report ascribes gold's gain to the greenback, and to short-term support at the $1,100 level. In other words, as the price dipped below $1,100, buyers came in. Another report, from Fox Business News, says that the greenback was pushed down by a Ben Bernanke speech in which he said that inadequate or inappropriate regulations - not monetary policy, in and of itself - is responsible for asset bubbles.


Speaking of the greenback, this Stockcharts daily chart for the U.S. Dollar Index shows that its recent run has definitely stalled. The chart below is a daily one, and does not include this morning's drop to the 77.4-77.6 level:



This pattern does not look like the '08 shoot-up, which took place from lower levels than the '09 low. The greenback may continue rallying from these levels, but present chart action does not portend a runaway bull move. Interestingly, the relative-strength indicator at the top of the chart worked this time 'round. The greenback has stalled after crossing the oversold line.