If the dollar goes down, perhaps there are external reasons for weakness in the dollar, and gold is just going up on its own.
The market's expectations for a more hawkish Fed have steadily increased during the past 30 days.
I think euro/dollar can get up to as high as $1.2500 near term. That is where I would expect to see the dollar get some traction.
The long-awaited downside correction in the U.S. dollar is now underway, and appears likely to continue for the near-term due to extreme institutional and retail investor sentiment readings and unmet minimum measuring objectives based on the greenback's breakdown earlier this week.
We're going to see a new, emerging period of higher long-term interest rates that are going to start now, and I believe they're going to carry on for some time.
I am sure the chart relationship will reassert itself. People are scrambling for commodities, including gold.
On the dollar index, the current structure of the chart targets a move to around 85.50. If and when it does get there, I think that is your inflection point. If you are a dollar bull that's where you want to see demand coming in and if it doesn't, that speaks to a much deeper decline and maybe a trend change.
The market in general is not expecting a rally. History tells us it is at times like these that a near-term rally is the most likely to begin.
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