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April 10, 2010

Dollar Rally Truncated

Gold had quite a week, posting a 3% rally and sporting the look of the beginning stages of a parabolic run. After such a choppy few months in which gold bugs had their hands slapped every time they were stuck into the cookie jar, I wouldn't be surprised if this thing just ran away from them without allowing for a comfortable entry.

gold daily chart

Our little yellow friend had help from the dollar, which posted a surprise drop... a surprise to those who believe it was set for new highs, that is.

us dollar bear market

Furthermore, recent breakouts in both palladium and platinum suggest more to come from this precious metals rally:

palladium daily price chart

platinum daily price chart

Stocks, on the other hand, are overdue for a correction that will at least relieve overly-bullish sentiment.

s&P 500 daily price chart

I say "brief" because I expect dollar weakness to fuel a larger run to highs before this cyclical bull ends.

 

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