Does a Rising Dollar Signal End-Times for Gold Boom?

The US dollar continues to sway in trading this week, down big against the Euro today after posting substantial comparative gains through most of last week. Gold (NYSE:GLD) and Silver (NYSE:SLV) prices, which are generally thought to move inversely with the dollar, have shed some value in trading in that span of time. Combine indicators signaling a possible slow-down in the Chinese Economy and an increasingly likely Greek -default scenario in Europe and you may see the dollar continue to rise against two of the world’s leading currencies.

So if the dollar finally starts to gain significant momentum, do the gold-bugs have reason to seek cover and latch on to other commodities? George Soros, the investment tycoon and philanthropist, recently sold the large majority of his funds’ holdings in Gold, having opined that the gold market is officially in a bubble. As QE2 nears its end expect more inflationary pressure on the dollar to be lifted leading to further appreciation in the value of the greenback. It is starting to look like Soros is on the money once again.

All told, the future market prices for Gold (NYSE:GLD) and Silver (NYSE:SLV) may hinge more on the success of the current economic recovery than anything else. Dollar prices will be more swayed by stronger US outlooks in manufacturing, trade balance, and the labor market, which are all hot topics on Congressional and Executive Agendas at the moment. Demand in emerging markets will play an important role as well, as burgeoning luxury markets in China and other rising powers may continue to prop gold prices in the near future.

Here are some technicals on Gold (NYSE:GLD) and Silver (NYSE:SLV) performance over the last year.

Gold (NYSE:GLD) Here:

 

 

And Silver (NYSE:SLV) down below:

 

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