The most troubling aspect of this dollar rally is that precious metals have not fallen below their February lows. It has also been interesting to note the recent surge in copper and silver, while aluminum remains beaten down. So we are not inclined to back off our bearish view on gold unless the euro price of gold were to surge above €350 per ounce. Note that next week marks the 6-year high-low-high turn cycle in gold priced in euros. If €350 can hold we expect a protracted decline in gold. If it breaks it would indicate that the markets were shunning paper money in favor of hard currencies and we would turn bullish on gold. Key resistance is at $438 in gold and $8 in silver.
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