Dollar Rally Could Pressure Gold
by Mike Paulenoff, www.MPTrader.com
Apart from why the dollar (DXY) abruptly reversed to the upside this morning, purely from my technical perspective this action is what I have been awaiting: some signal that all of the corrective-looking weakness off of the Dec 22 high at 78.45 into the 1/13 low at 76.60 actually was a correction. Today’s strength so far has the right look of the completion of a 3-week correction within a larger, intermediate-term recovery rally period for the DXY that is heading for a test and hurdle of 78.45 on the way to 80.00. If such a scenario is about to unfold, then spot gold prices – as well as the SPDR Gold Shares ETF (NYSE: GLD) -- should experience currency headwinds that could pressure prices towards a retest of the December low at $1074, on the way to $1050/20.
