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Urgent buying
It's taken gold exactly two weeks of urgent buying since its breakout from the 15-month triangle to top the May 2006 peak, intraday. This chart confusingly shows a closing price of $723.70, Tuesday's floor-session close at 1:30 p.m. EDT, but a high of $735.50, which occurred an hour and a half later, after the Federal Reserve board announced a cut of 50 basis points in the Fed funds rate.
The prospect of accelerated inflation -- the nasty side-effect of Ben Bernanke's potent medicine for the stock and bond markets -- pushed the U.S. dollar back into its tailspin and sent gold, among other commodities, higher. Gold remained above $730 at 4 p.m. EDT.
After the briefest of pullbacks, the U.S. dollar index is back outside its falling wedge and at its lowest point in 15 years.
GDX, the gold-mining ETF, shot up out of its brief consolidation and is at its highest level since May 2006.
Neither gold nor the gold-mining stocks has thus far offered an opportunity to join the powerful rally on a significant pullback. One will no doubt come, though as both are far from overbought on a weekly basis, it could be at higher prices.
It's taken gold exactly two weeks of urgent buying since its breakout from the 15-month triangle to top the May 2006 peak, intraday. This chart confusingly shows a closing price of $723.70, Tuesday's floor-session close at 1:30 p.m. EDT, but a high of $735.50, which occurred an hour and a half later, after the Federal Reserve board announced a cut of 50 basis points in the Fed funds rate.
The prospect of accelerated inflation -- the nasty side-effect of Ben Bernanke's potent medicine for the stock and bond markets -- pushed the U.S. dollar back into its tailspin and sent gold, among other commodities, higher. Gold remained above $730 at 4 p.m. EDT.
After the briefest of pullbacks, the U.S. dollar index is back outside its falling wedge and at its lowest point in 15 years.
GDX, the gold-mining ETF, shot up out of its brief consolidation and is at its highest level since May 2006.
Neither gold nor the gold-mining stocks has thus far offered an opportunity to join the powerful rally on a significant pullback. One will no doubt come, though as both are far from overbought on a weekly basis, it could be at higher prices.
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