Gold Doesn’t Like a Rising USD

With the European liquidity/solvency crisis in full swing and major disappointment from the markets on the Fed’s announcement, it looks increasingly likely that the USD will continue to catch a bid.

A likely casualty of a higher dollar is gold:

While gold remains in a clearly defined uptrend, previous periods of USD strength have led to consolidations towards support. Note trendline support currently sits around $1,600.

Note that prior periods of USD strength have taken the wind out of gold’s uptrend. With the 150 day moving average and the long term uptrend sharing the $1600 that area looks like the most probable target for this consolidation.