"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, February 6, 2013

US Dollar Continues Holding Chart Support

The USDX continues to show very substantial buying down near the 79 level. For nearly 5 months now, every time the index has moved down towards that region, buyers have come in and bid it back up.

It should be noted that this index has had difficulty maintaining its footing much above the 81 level for any length of time so effectively, it remains rangebound until proven otherwise.

If it were to manage a solid weekly close above the 81.50 level, it would probably make a run towards 83.50.

I want to continue to monitor this chart, especially in relation to the price of gold. So far the rising Dollar has not negatively impacted the price of gold as it has bounced off the $1660 level in spite of the US Dollar move higher off of its support level. We might need to see the Dollar break down however before gold can take out that very formidable resistance level above $1695 and extending to $1700. It seems that the stall in the US equity market move higher has generated a bit of safe haven buying in the metal for the immediate time being.

Right now, gold remains stuck in a sideways range until proven otherwise.