The dollar was on the defensive Friday after holding its value relatively well since Wednesday's upside explosion in gold prices. Let's notice that the Dollar Index (DXY) is pressing on its key Aug-Sept support line near 78.00, which is an ominous sign heading into a three-day weekend.
The fact that gold is holding nearly all its three-day gains suggests strongly that money is moving into the precious metal and now more obviously and aggressively is moving out of the dollar. Good for holders of the SPDR Gold Shares (NYSE: GLD), and negative for the PowerShares DB US Dollar Bull ETF (UUP). The fact that the equity market is acting well also has taken some impetus away from buying dollars.
