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 U.S. dollar. It is, however, a very good time to produce and sell commodities.

That’s it for the day, and for the next week, in fact. Your editor will now pack up his blue fighting fish and haul him down St. Kilda Road to the fish sitters. We are off to America for two weeks to see family. Taking over the commander’s chair from the Old Hat Factory is Al Robinson from Money Morning and our trading strategist from France, Gabriel Andre. See you in few weeks.

Dan Denning
The Daily Reckoning Australia

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Source: Inflation Up, Gold Up, Oil Up, Dollar Up, Dollar Down

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