Gold Price

The argument here back on 12/7 was that the economic fundamentals continued positive and
that the blow out in the  market over Half 2 '16 left the metal sharply oversold. I also did some
complaining about how difficult it has become to trade gold because the futures market has been
grandly inflated by large pools of hot money over the past 15 years. Well, the market has rallied
here in the early going this year and the deep oversold is being remedied reflecting a weaker
dollar and a flat stock market since mid-Dec. Inflation fundamentals have also picked up on the
basis of stronger US and China economic activity. The US dollar weakness has probably done
the most to carry the day.

The gold price is approaching its 50 day m/a and is also approaching the $1200 level. That $1200
price has served as a resistance point in recent years and when it is pierced with conviction, can
extend a rally.  Gold Price

I have a macro argument that the fundamentals for the USD will strengthen further over the long
term. It is a view I have held since the early aftermath of the deep recession of 2008-09, but it
calls for very gradual improvement in the dollar's standing. At this point, I regard fair value for the
dollar to be around 90 - 92, but it has been running ahead of schedule since the Fed first tightened
policy in 2014 by ending QE programs. Perhaps USD vulnerability will increase out ahead if
inflation continues to firm and the US trade position weakens further.