Three weeks ago I opined that, given the unchallenged strength of the United States dollar and the general all-around weakness of gold, it might be a good time to move out of dollars and into gold.
As it happened, the dollar index had its worst day yesterday since 2015. The reason, people had somehow figured out that China would be scrapping most of its zero-covid policy and re-entering the game of international commerce more vigorously. By the by, China is a large buyer of gold.
And gold itself, the barbarous relic, had a very good day indeed. It rip-roared its way up $50, to 1682. This might very well be a reflex rally in a bear market. After all, gold is still well below any level that would appear to be technical resistance. That means, it could be a short squeeze.
The only amateurish observation I would make is this. While gold was bursting upwards in more than a 3% rise, no one in the financial media expressed any interest in it. It almost felt that they had all decided that gold was simply a barbarous relic, unworthy of their interest or intention.
In the world of contrary opinion that means that the rally might have some legs. It is not a time to short gold and buy the dollar. As I noted three weeks ago, the opposite trade seems more profitable for now.
Stay tuned.
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