Friday, December 18, 2009

Gold Mining Index & The Dollar

(1 gm) .999 Fine Gold Bar - (No Assay Card)The US Dollar is finding resistance at the 78 level. The first chart (posted 12/15/09) shows that the gold mining index (GDX) is a buy, now trading at the lower end of it's uptrend channel. However...has the dollar hit a near term top at 78 or does it have more upside? I believe we are at an inflection point for gold, stocks, dollar and oil. First of all as I write this we're going into the final hour of quad options expiration not to mention alot of managers are doing some end -of-the-year reallocating. The technicals say buy or at least start accumulating gold here, but my gut call is suggesting that gold has further downside...I still maintain a $1075 target. I would say start "accumulating" gold, I like Yamana Gold (AUY) at $11, now at $11.50. I also like Silver Wheaton (SLW) at $14 now $15, Hecla (HL) at $6 and Freeport McMoran (FCX) at $73. Long term these should all perform as I expect the dollar to head lower.
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