The US Dollar

Monday of this week the US dollar finished down 4 days in a row **and** stopped on the 50% Fibonacci dollar rally retracement level. The dollar has also well established a good down trend over the last 2 months as well as a down channel. The Fib level that the dollar stopped at is just above the bottom of the channel. Between the Fib level, the 4 down days in a row and the location/level of the channel bottom, it makes sense that the dollar took a breather from going down. If it continues to go up, it would hit the top of the channel about the end of next week. The top of that channel is an important down trend line.

The US dollar is the most important element to what gold and silver do.

I don't know what is going to happen next week but it could get really interesting when you consider that the psychology or attitude of leading influential market minds is changing:

On Richard Russell:

By Peter Brimelow
CBSMarketWatch.com
Friday, September 9, 2005

NEW YORK -- A legendary bear may have turned bullish, sort of. But he and the authors of a remarkable new report still harbor suspicions about market manipulation -- something that could end very badly for investors.

Dow Theory Letters' Richard Russell was artfully qualifying his sudden bullishness on Thursday night. He's just suggesting that "those willing to speculate" should buy Spyders, the S&P 500 tracking stock And it may not work. (Russell played the 2003 bounce this way too.)

Russell's also making bullish noises on gold. And his comment that really got my attention late Thursday was this:

"You can be sure that the central banks don't want to see an upside breakout in gold. ... The primary trend of gold is bullish, however, and the primary trend is stronger than all the central banks in the world taken together. When gold's time comes, gold will brush by the manipulations of the central banks and their friends, the gold banks."

This suspicion of covert market manipulation by governments in alliance with favored private-sector firms has been voiced with increasing frequency by Russell and other letters.

Indeed, several letters muttered about suspicious late-day rallies as detailed in our June 27, 2002, column. Of course, it's too wild an idea for most of the mainstream media.


On David Gartman:

(GATA) Dennis Gartman Takes a Black Helicopter Ride

5:13p ET Friday, September 9, 2005

Dear Friend of GATA and Gold:

Surreptitious government intervention in the financial markets has gotten just too obvious. Even respectable people can see it now.

...

"Turning to gold, we are much impressed with the fact that gold is firm even as the U.S. dollar too has strengthened over the past two or three days. For a very brief moment yesterday, spot gold traded to $448 before being turned back.

"We can never be certain who the sellers were at that level. GATA would have us believe that it was the always-nefarious government and Wall Street entities who work in collusion to try to keep the price of gold down. Others would have us believe that it was the selling on the part of those who are short large numbers of $450 calls. Others still would have us believe it was small sums of hedging on the part of gold producers, and others would have us believe it was "profit taking" on the part of recent long position takers.

"We believe it was a bit of all of them, and we might be persuaded that some small part of what GATA has said may even have an even smaller kernel of truth to it, for their data is persuasive."

Information about subscribing to The Gartman Letter can be obtained by writing to [email protected]. You probably can't afford it -- GATA finds out what's in The Gartman Letter only because of the occasional black helicopter airdrop -- but let's welcome our new convert.

Who's coming over to our side next -- Alan Greenspan?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
***


Hey, the HUI (the US Amex market gold and silver stock index) made a new 5 month high. A 12 month chart of the HUI

Silver and the silver shares are lagging gold but should end up being more explosive than gold since silver is now more rare than gold. And, like gold, silver is actual money (nobody's liability).

Gold priced in Yen made a new bull market high.
Gold priced in Euro is just a tad below making a new bull market high.

Gold has just a little to go to make it above late 2004's high.
A 2 year weekly bar chart of gold

All and all, not a bad week.