GoldMoney Alert - 10 July 2007

The Dollar Plumbs New Depths

The US Dollar Index has declined 3.4% so far this year. The interesting point is that one-fifth of that decline happened today. The dollar plunged across the board, in the process hitting a new record low against the euro and a 26-year low against the British pound.

The Dollar Index closed today at 80.86. It is now at its lowest point since closing at 80.53 on December 30th, 2004. That is the last point of support that we can see on the following chart. Once that point is broken, the pace of the dollar's decline is likely to accelerate.

Gold and silver remain the best way to protect yourself from the problems facing the dollar. What's more, the precious metals remain undervalued.

From its $50.81 low in January, crude oil has climbed 41.2%, which is just one of the reasons the CRB Continuing Commodity Index today made a new all-time high. During this same period, however, gold has climbed 5.6%, while silver has climbed only 2.1%. In fact, the price of gold in Canadian dollars has actually dropped 5.4% this year. All of this means that the precious metals are cheap, and their prices have a lot of catching up to do.

Published by GoldMoney
Copyright © 2007. All rights reserved.
Edited by James Turk

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