Gold – Gold has had a strong run based on QE2 rumors. The last week or so has seen Gold move in a sideways pattern allowing some of the overbought technical indicators to pull back. It does appear as though we are preparing for a move up to the $1400 level. Investors should act with caution and tighten up stops as we may be moving in to a classic ‘buy the rumor, sell the news’ trade.

US Dollar – I am using the US Dollar chart because we are at an important junction rattling around the January low. If we are to break through the 76.75 level the December low which is an important line in the sand awaits. One should note that the US Dollar is currently very much oversold and we are likely to get a snapback rally within the next few weeks that may just catch many market participants by surprise.

More on what might be coming tomorrow.

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