The U.S. Dollar Index is on the rise amid heavy trading and is further proof that the gold market is due for a fall. U.S. dollar prices on the world market reached an eight-year low on Nov. 23, 2009 (Infinity Trading Corp), at close to 74, and again on Nov. 1, 2010, at about 75 after rising to a high of 89 on June 7, 2010.
Today prices were rising, and even if they fall slightly in the near term, dollar prices are due for a major rise. The dollar index contract is measured as $1,000 times the index so at recent lows delivery on a contract would cost around $75,000. We could see a rise to 80 or above soon. This would result in about a 6 percent increase in the value of the dollar but much more is to be expected when insiders complete their accumulation. Before this happens, gold will have to be sold off because the major holders of gold contracts will be exchanging gold for dollars and in order to profit most on the exchange, dollars will have to be cheap so they will appreciate afterward. The simultaneous positioning of the two markets, gold at all time highs and the dollar at its lows is proof that a reversal is imminent. The price of gold cannot go up if there is a uptrend in the dollar market and classic 1-2-3 Top and Bottom formations are found in each of these markets.
Gold was down from the March 7, 2011, historic high of about $1,446 per ounce to $1,422 per ounce (Infinity Trading Corp) and should keep falling if the dollar continues to rise. Predicting price moves according to 1-2-3 Tops and Bottoms is not entirely accurate because 20% of the time markets making these formations continue in the direction of the trend, however with gold hinging on the dollar market such as it is, with both of these markets making opposite formations, the stage is set for a reversal in both markets. Nowadays, the value of gold is a good conversion of dollar euro. But some experts believe that it will fall in the future as US dollar positioned to rise. Hence, some people are reconsidering whether or not they should still invest in gold.
Insiders in the world markets, big money conglomerates and money moguls are buying up the dollar at its record lows and holding gold for the sell off at record high prices. This is how it works in the world of high finance. Buy low and sell high. Before the dollar gets off the ground, insiders will hold a major share of it and prices will rise just as they did with gold for 10+ years. Since the two markets are dependent on each other, gold will always be high when the dollar is low and the uptrend in the dollar will signal the gold sell off.
“U.S. Dollar Positioned to Rise- Gold Will Fall” Doug Brown
Infinity Trading Corp U.S. Dollar Index weekly chart and Gold daily chart