A strengthening dollar and a drop in oil prices caused spot gold prices to fall more than 2% today – its lowest level in a week, according to Thomson Reuters.

Dan Denning in The Daily Reckoning Australia doesn’t think this is a cause for concern: “After regrouping, shaking out the weak hands, and giving the dollar its due, gold is on the march again.

“Our friend Kevin was on CBS Marketwatch telling the host that gold could reach US$1,300 or US$1,500 in ‘just a few months.’ His original forecast was for a move to US$1,500 in twelve months. But the speculative money is moving fast, Kevin says, and that could drive the move more quickly than he expected.

“What the speculators may not know is that they have the fundamentals on their side and not just the technicals. That’s always a good thing in a trade, when you have more than one thing going your way. In gold’s case, U.S. dollar selling is driven by some technicals. The dollar is ‘retracing’ its recent rally. Beyond the charts are the facts about the global currency market. The Fed does not look like raising interest rates this year. Australia might and the European Central Bank might.

“With interest rate differentials widening and commodity prices confirming it, it’s not a good time to be the US dollar. It is, however, a very good time to produce and sell commodities.”

Steve Sjuggerud in Daily Wealth has a hot gold company tip. Read on here to learn how to cash in.