Now is the Time to Flip Your Dollars for Gold

Back in May, I told you to ditch your gold for greenbacks.

At the time, gold was sinking below $1,260 for the first time in months. The dollar looked like it was poised for a major breakout toward its 2013 highs. And virtually no investors were remotely interested in these developments…

Of course, a lack of publicity didn’t stop the market forces that were already in play. Gold tripped another 5% and sank toward its lows. And the dollar exceeded all expectations, rocketing to levels not seen since 2010.

“Just a few weeks ago, many analysts were talking about a potential breakdown in the dollar,” I wrote on May 30th. “But things aren’t always as they first appear. Many times, the best trades are the ones you least expect.”

But hang on just a minute…

Gold is now enjoying its biggest three-day rally since June. And the dollar looks a little tired after its big move higher. That means it’s time to flip this trade.

More on this idea in just a minute. First, let’s check out the recent dollar rally. Here’s what I was seeing in the dollar index back in May:

And here’s how the move unfolded:

Trading gold for greenbacks was a stellar trade — and for now, it has run its course. The dollar will need to digest its parabolic move. And gold looks ripe for a quick comeback…

For the record, I think the dollar’s initial move will stick. The dollar index could very well end up higher six to eight months from now — but the road could get volatile. Also, while gold remains in a bear market, snapback rallies like the one you’re seeing right now can offer fantastic opportunities to score quick profits.

Regards,

Greg Guenthner
for The Daily Reckoning

P.S. I’m not a gold bug. I follow trends. And right now, the trend is for a quick snapback in the gold price. Next week, that could change. And if it does, I’ll be there to tell you about the new trend you need to be watching. But if you want that info first — before it hits the Daily Reckoning website… before almost anyone… I’d be happy to send you a quick email alert letting you know what to look for in the trading day ahead. Just click here to sign up for my Rude Awakening e-letter, for FREE, and each morning, right around the opening bell, you’ll receive an email with my full analysis… including the trend to follow that day, 5 important numbers to watch and at least 3 specific chances at real, actionable stock picks. All completely FREE. Click here now to sign up.