I'm watching the Dec10 USDX this morning. To some surprise, the dollar has rallied this morning as tensions rise in Ireland and across the continent regarding Euro QE to infinity. Never forget that the dire fiscal situation in Europe pales in comparison to the individual, state components of the US but, for the near future, that doesn't really matter too much.
In the short term, watch the Dec10 USDX. Last week if failed on consecutive days to breach 79.60. As I type, I have a last of 78.87. A move through 79.60 and we may see 80 and then 81. This amount of dollar strength would be counter-productive for the entire commodity sector as well as equities. Therefore, I don't expect it to happen. Instead, let's look for the USDX to approach 79.50 then double-top and begin to roll over. Watch this very carefully.
As predicted last night, gold tapped 1365 very early this morning before rolling over. It should be very well bid anytime it moves below 1350. See the chart below. I would not get concerned unless it moves decisively though 1341 and, even then, I have a very hard time believing it could get through 1330. More likely, it'll be range-bound between 1345-1365 until it breaks out to the upside and moves into the resistance area between 1375 and 1390.
More after the NY close.