Gold Surges as Dollar is Unable to Follow-Through to Upside
Last week the December Dollar Index posted a weekly reversal bottom, but the overnight action failed to confirm this bottom with a follow-through rally. This sets up a break of at least 50% of last week’s range or even a new 15-month low.
The weaker Dollar has triggered another round of buying in December Gold. Last night gold reached another new all-time high. The fundamentals remain intact for this rally to continue. Technically, conditions are overbought but traders will be waiting to buy after any sizeable correction. The weekly chart indicates that chances are fairly remote that the trend will turn to down anytime soon.
Equity futures are up big overnight as traders realize that trading the long side in the stock market is the best game in town as long as pressure remains on the Dollar. Last night’s rally has already retraced more than 50% of the recent drop in the market. Regaining 1100.00 is bullish for the December E-mini S&P 500. The next upside target for this contract is the major 50% price at 1122.00. Last week’s closing price reversal top was not confirmed which means that 1083.00 will most likely become a new higher bottom.
