Tuesday, September 08, 2009

US Dollar Devaluation Has Begun

Some charts to show a different perspective on the USD$ breakdown.....

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When gold broke out of its volatility squeeze last week, I thought that was slightly interesting, but not a real significant event especially given that the USD$ stayed within its trading range.


Sunday night was interesting. Gold persisted in staying comfortably above its breakout level, Oil broke back above 70, and Euro broke out to new highs of the year. This confirms that the gold breakout was not just some random coincidence. These 3 markets are accepting higher values because the US dollar is breaking down.
The implications here are that dips in these 3 markets will be bought. There are shorts that are stuck and need to get out of their positions. I cannot see anything to change this fundamental change in trend unless one of the markets experiences a persistent breakdown, much like what we saw with Gold last week.

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