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Watching the Dollar versus Gold
One of the key market relationships we’re watching is the dollar and gold. If the dollar turns up in a big way and sustains the gains into the close, then tomorrow could be a very dangerous session for equities. The daily cash dollar index (DXY) popped above its nearest-term resistance line this morning, which triggered a negative reaction in the gold market and the SPDR Gold Shares (NYSE: GLD). Let’s notice that the weakness in gold has pressed prices beneath key micro (coil) support at $1050. Additional weakness that breaks $1040 will trigger continuation to the $1020 area next. Meanwhile, for the DXY to get any traction, the price structure must hurdle and sustain above 76.30.
