Since the collapse of the world’s equity market, the question now is whether we have seen the worst. The recent rally of the US market seems to suggest the possibility that the worst , at least for now, is over. The bears, though, warn that the third wave of disaster is just coming, and that disaster is the collapse of the US dollar.
Actually, US dollar experienced an extraordinary strength during the collapse of the market. Since US dollar is the reserve currency of the world, US dollar has been in strong demand during the panic uncertainty.
First chart attached is the US dollar weekly chart. See that strength? That is the chart of a panic buying.
The second chart is gold weekly chart. Gold was holding up very well in the face of massive buying of US dollar. Somehow, there are big money who look further: what if , the crisis exploded so big that even the reserved currency is not trustable?
The third chart is the weekly gold based on Euro dollar.
good to know that gold is doing good.
Posted by: gelette | December 01, 2008 at 05:18 AM