Archived IMT (2009.03.12)

Today's gold bounce thrives on the latest interest rate cut, as the SNB slashes rates to 0.00%-0.75% from 0.00-1.00%. As I warned in my book in Chapter 1 (Gold & the Dollar) about situations of positive correlation between the two, the classic inverse relationship may no longer make sense as the metal exploits the collective secular devaluation of currencies and not just the dollar. Central banks race to further reduce the price of money via credit easing only further boosts the price of gold. FX Selling Intervention + Devaluation = Gold Appreciation. Today's moves support my analysis where I indicated a bottom in gold at 890 (periodic declines no more than 10% and 50-day MA not breached.