How Much Lower Can Gold & Euro Go???

Gold, silver, oil and most commodities took a hit Wednesday as the Euro ($XEU) broke below the 135 support level. Most analysts are looking for it to retrace towards it's recent lows of around 125. On the GOLD:EURO ratio- it is hovering just around 8-to-1 as most Europeans continue to buy gold as a hedge against their gov't debt issues. Some people are citing a 'strong' dollar...Itz doesn't agree. That it is more of a weaker Euro and stable dollar situation. Gold could have a downside risk of $1000 and the Euro towards 125 to maintain the 8:1 ratio. On a weekly chart the Euro is over sold, looks like a final leg down in the next few weeks could play out.
Itz Pix exited the gold mining etf GDX, buy still maintains Yamana (AUY) & Silver Wheaton (SLW) in it's portfolio. One shouldn't totally exit the gold position, a good reason to buy gold is the fact that the South Korean central bank said that it will start to buy gold and the weakness of euro.
Below is a video from CNBC & a rep from Fitch, which has some interesting comments on the downgrading of Portugal debt.

Gold The Global Currency

       The problems with the Euro most agree will not be solved soon, but will take months if not years. Greece at less than 3% of Euro GDP is a drop in the bucket compared to Spain (12%) or France (21%). This could be the beginning of the end for the Euro. Near term as I've been saying, we'll see a bounce in the Euro/ pullback in Dollar...but longer term the Euro has quite a drop if things fall apart. 135/136 has presented support, there maybe a bounce to 139/140, the next support is around 125.

Since 2003 the $SPX & $XEU have risen and fallen together. A rise in the Euro often tells us that a rise in the stock market is coming. Similarly, falls in the Euro is bearish for US stocks. But if you measure gold in euros, it has broken out to all-time highs and now costs more than €800 an ounce.
One has to think of gold not as a commodity but as another currency. Given the financial stresses in the eurozone, is it any wonder that gold has been rising against the Euro? Most traders think of the price of gold in US dollars...gold is a global currency and is relative as to what you buy it in. Whether you live in Europe or the U.S., gold is your hedge against the fiscal irresponsibility of your own government

Euro/Gold 2 Hour Charts

Several key levels to watch on 2 hour Euro & Gold charts.