Gold, The Euro, and the U.S. Dollar

I was surprised when my unique price momentum models forecast that Gold and the U.S. Dollar would recover in unison. I reported these forecasts at the time, but pointed out the dichotomy. I'm pleased that my models proved useful in such difficult circumstances, but I'm gradually coming to recognize a darker side concerning this new reality.

The U.S. Dollar is the world reserve currency, and as such it has historically reflected the intrinsic value of Gold. Gold up, the U.S. Dollar down, and visa versa, until now.

Let's hope that the recent aberration is just that. The EEC is pushing hard to promote the Euro as the world reserve currency in place of the U.S. Dollar. It seems to me that Gold (or Oil)expressed in Euros has potentially negative implications for us in North America.