Thursday, January 7, 2010, 3:27AM ET - U.S. Markets open in 6 hours and 3 minutes.
Updated from 9:22 a.m. ET
After hitting a 13-year low vs. the yen and a 12-week low vs. the euro earlier this week, the dollar has rallied in the past 24 hours due to a combination of factors Ashraf Laidi, chief strategist at CMC Markets, says will prevent the greenback from suffering the worst fate predicted by others, including:
The Fed isn't the only central bank slashing rates and taking other extraordinary action — and many of its peers are playing catch-up. On Friday, the Bank of Japan cut its target-lending rate to 0.1% and said it will but commercial paper assets. Meanwhile, the euro slipped on expectations of more ECB rate cuts ahead after the European Commission said the region may suffer a "substantial" effect from the credit crisis.
The risk-aversion trade is coming back on. "We think the stock market has not seen the lows yet," Laidi says.
After a 20%-plus rally from the Nov. 20 lows, stocks are came under pressure Thursday and early Friday due to renewed concerns about the fate of the automakers, as well as the financial sector after Standard & Poor's put a negative outlook on the debt of GE (citing its GE Capital unit, specifically) Thursday, and Friday cut the ratings and outlooks of 12 banks, including Goldman Sachs, Bank of America, JPMorgan, Citigroup, UBS, and Credit Suisse.
Update: Stocks futures turned higher and the market rallied early Friday after President Bush pledged $17.4 billion to aid the automakers, removing concerns about an imminent bankruptcy.
"Allowing the auto companies to collapse is not a responsible course of action," President Bush said.
Earlier: These factors, among others, will prevent substantial dollar weakness in the short-term, according to Laidi, author of Currency Trading and Intermarket Analysis.
But in the intermediate-term, Laidi is bearish on the dollar because of the extent of the government's borrowing to pay for bailout mania.
"I'm not telling people to put on a blindfold and buy gold [but] gold is going to going to continue to lead other industrial commodities not only against the dollar but all other fiat currencies," he says.
Gold may suffer short-term if and when the risk-aversion trade (which is good for the dollar) comes back on, but Laidi forecasts the metal will hit $1,100 ounce in the second half of 2009.
it is obvious the only we can pay down our debt is by inflation and thus gold will be king.
YOU CANT EAT '' GOLD '' my friends tell me. true enough i tell them, but iknow a lot of farmers that would gladly trade me potatoes cabbage and beef for some gold, but not for that toilet paper with the green ink on it,,,,,,, the ink is quite irritating after a while.. IF YE WOULD BE WEALTHY, BUY OF ME FINE GOLD'' ---- THE HOLY BIBLE----
"Dollar still play an active role.....It is stronger than gold and other commodities......The Dollar will never die and be stronger than ever." Just wait until countries like China (that actually have savings) want to throw some $600+ billion stimulus packages at their economy and try to finance it by cashing in their US treasuries/bonds. Then you'll see the dollar really wither. All this talk about how things are just as bad or worse elsewhere is all propoganda to get people to buy into the illusion that the dollar is still strong. If you are thinking of buying gold, you better do it soon, because I also agree it will soon be illegal to do so....
There is so much gold around the world, that even if it could reach $2000 an ounce it's value would crash because there would be so much dumping of gold on to the market. People are already pawning and selling their gold, so just think what will happened. Also their are a lot of governments throughout the world with gold reserves; Fort Knox.
Who is this guy kidding? People you better wake up and stop listening to these conmen. This guy wants you to buy gold, so he can sell his postion on the spike. We are going to have deflation, gold will be useless. Cash is what you want Think clearly about it. The industrial and retail demand for gold is going to fall off dramatically. The fact is trillions of dollors of value have vanished overnight. Think about it, housing values, stock values, and bond values. We are not going into a inflationary time. People are not spending money because they of fear. Inflation mean to much money chasing a short supply of goods. I certainly am not seeing that. Just look at the carmakers.
This is absolutely correct and silver will even outperform gold. Check out www.newgoldira.com
Gold was rendered illegal in the 1930's in order to effect a devaluation of the dollar. It is no longer necessary for the government to confiscate gold in order to devalue the dollar. The dollar is always being debased and has been ever since the link to gold was broken. Anyone who is worried about gold being confiscated now is basically saying that this is no longer a free country. If you do not think you are free, why would you elect to hold the currency of the tyrants? No free man forges his own chains. Buy something else...Palladium looks cheap, or copper pipe, or whatever. The government cannot confiscate everything.
Its interesting that many nations are hoarding gold, especially Germany. How people or nations vote with their feet is always worth considering.
Gold to $1100 in a deflationary environment. Cmon man use your intelligence. Maybe in 3 - 5 years, but gold is still well above it's inflation adjusted price.
The American economy is on life support and the FED is in panic mode. Common sense says gold is the way to go.
trumpman84 ------ HAS IT RIGHT "How does gold hit new record highs in a liquidity starved, recessionary, near deflationary environment?" Who ever can help provide liquidity in this market will reap. huge profits.
Gold will not hit $1,100 an ounce not in these economic times.
I can predict with absolute certainty that either gold will go up next year or it will go down (that is, unless it stays the same. Any other forecast is just speculation, lip-flapping, bull****. I get tired of useless forecasts. When will people learn they signify nothing whatsoever? It isn't fun, it's misleading and boring.
Gold will go to $1,500 or $2,000 per oz this year because of the huge increase in the money supply -- the US, the Europeans, the Japanese are just printing money. The result is always an increase in the price of gold. Sure, gold is high now, but since its highs the money supply has been hugely inflated. Gold has to catch up. Look at history.
I heard the very same BS about oil reaching $200 six months ago. Another bubble. This time golden. Buy guns and ammo instead.
I'm buying ammo. With ammo I can get anything else I need, including food.
There are enough dollars in the world to buy all the ps3 games!!! SO WHO CARES?????????????????
There are enough dollars in the world to buy all the ps3 games!!! SO WHO CARES?????????????????
There are enough dollars in the world to buy all the ps3 games!!! SO WHO CARES?????????????????
Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.
Yahoo! Finance User - Friday December 19, 2008 10:19AM EST
Inflation is coming.....