While gold broke to new highs today (not well shown on this chart, but still happened) the dollar broke to new lows.  Our considered opinion and analysis is that this is just a leg up, and not the beginning of the end.

Nevertheless it behooves traders to take these signals and ride the tiger in the direction it’s going. That includes being short the dollar.  To our knowledge there is no news or fundamental event pushing prices.  So as far as we can tell it is pent up technical conditions.  Shortly we expect the IMF to announce again it is selling gold to drive the price back down.

We will compute a target for gold, contrary to our usual practice of trading the trend, and when it hits it we will scale out.  But we will keep a base position even when the move collapses.  We will post the target and its computation shortly.

Here, FXE, an ETF to short the dollar: (or long the Euro)

Note gap.