Follow Up: $USD And 2012 Gold Outlook Based On The 10-Year Historical Trend

Here's a follow up round on this recent post:2012 Gold Outlook Based On The 10-Year Historical Trend

2b (a remarkable micro-cap stock picker) responds: "My only question would be how gold has correlated to the U.S. dollar and what effect a strong dollar might have on your future price prediction."

Good question. Best gold type podcast I've heard in a while was Sinclair is linked from here: http://www.jsmineset.com/2011/12/26/a-modest-1700-2100-gold-price-in-2012/

 

He claims Pierre Lassonde (King World News) is expecting gold between $1500 and $1800 in 2012 and that is based on strong dollar. Sinclair's call ($1700 to $2100) is based on the dollar not being as strong as expected.

 

 

But here's a chart of the dollar action for the four big corrections. I find for the three previous corrections:

(a) The dollar rises up until the end of the correction.

(b) What the dollar does after the gold bottom varies from one correction to another.

 

So, if the dollar keeps rising at this point, I expect that the bottom is not yet in for this correction. I guess you are expecting further dollar strength as Europe continues to look risky. The "Japan is next" buzz is starting to get thicker also. Japan right now seems to be like Italy was when all eyes were on Greece. The smart guys were talking about Italy. Now the smart guys (Kyle Bass...) seem to be talking about Japan.

 

MontyHigh

Comments

[Mike]

What is the next MF Global government aided and abetted fraud?

Which will arrive first MFG II, a TBTF Bank or Sovereign Default Derivative Domino or another Black Swan like a terrorist blowing up a major oil field?

CASH was stolen from customer segregated accounts including physical precious metals held in storage customers are paying a storage fee.

Customers were locked out of their accounts for a week generally to their personal financial detriment.

Judge ruled there was no conflict of interest for JP Morgan Legal Client acting as trustee.

Bankruptcy was filed as a commodities brokerage instead of equities brokerage so customers were not first in line so JP Morgan was made whole.

Corzine still has not been charged or arrested going on eight weeks now.