Archived IMT (2009.01.20)

BOTH GOLD & USD are rallying, an unusual pattern manifesting that current dollar strength is widely emerging by default (UK banking troubles & Spain's downgrade) rather than reflecting any improvement in USD fundamentals. Stabilising rising risk appetite also helping to boost gold to 1 1/2 week highs after the metal managed to hold above its 2-mth trend line support of $805. The Jan 14 note (see Intraday Market Thought in archives) argued for $850 target based on troughing stochastics, worsening US retail sales and falling CPI. Chapter 2 of my book has 21 pages on Gold and contains recent case studies of both gold and dollar moving in tandem. See Amazon page for sample pages in Chapter 2. CAD stabilizes from expected -50 bp rate cut.