Check out this chart I made up below. I lade a chart of the UUP which tracks the Dollar Index against a chart of gold. It's a perfect example of why I'm bullish long term and bearish short term. See where the spread starts to widen at Line A? That's where gold started to get ahead of itself and I believe the mini-correction we're seeing in the precious metal will take us back down to Line A, which is about $1500. This chart also proves my theory that the value of gold isn't rising, the value of the dollar is falling! I covered half my Gold trust ETF (GLD) shorts this morning cause we've fallen so much but I'll leave the rest on 'til we hit that $1500 level. I'll add to my shorts on any strength in gold tomorrow off the Jackson Hole conference.
This is not a recommendation to buy or sell any securities. DAK was short GLD at the time of publication but positions can change at any time.
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