Gold appears to have bottomed, and is now building a foundation for further upside potential. Gold is up more than $30/ounce from its low of $904.30 last Thursday on the Apirl 08 contract. I am long gold as of yesterday. Unlike other commodities, I tend to take longer-term positions on gold, primarily because it has a somewhat more erratic personality. I couldn't help but be struck at the similarity of the two charts above. The one on the right is the tick chart showing a period of only about one hour today, and the one on the left is the daily chart, showing a period of about two months.
The US Dollar rally has fizzled. This is no surprise given the weak fundamentals of the US economy, overspending of the US government, and inflationary monetary policy of the Fed. Perhaps it will consolidate, but the long-term sentiment is lower. This proably won't change measurably until the American people begin to reduce their debt, both collectively and individually. They are far too indebted for the long-term health of the economy and the currency.
