Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Little Joe who wrote (104937)	11/27/2009 12:23:15 AM
From: The Vet	1 Recommendation Read Replies (1) of 116555

Eventually bullish, but there could be a short downturn in reaction to a stronger US dollar. For some reason the market seems to believe that whenever the US dollar index strengthens due to "safe haven" buying then gold must go down for no better reason than it is priced in USD. However demand for USD as a safe haven currency doesn't detract from the even better safe haven of gold IMO and we all must remember that the relationships between currencies are ratios, not values. In addition the only "safe" place for USD is in treasuries, and they have zero upside at the present time and really have nowhere to go other than down in the longer term. The USD up, gold down logic, only holds if you believe that nobody holding USD wants to buy gold with USD and that all gold buying originates off-shore with other than USD linked currencies, when in fact all currencies are USD linked to some extent. So in a nutshell gold is likely to dip a bit (it has already) and then resume its bull run. JMHO......

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