Just two days after my post that USD's uptrend would continue (here), USD was hit by sharp correction that sent it back to its uptrend line. See chart below.
Chart: USD's daily chart as at April 24, 2009 (Source: Stockcharts)
Naked Capitalism has pointed out that China has been secretly stocking up on gold (here) in a move to get away from the USD. China has been very vocal about a drop in the value of USD as her holdings of US Treasuries and Agencies rose from about $275 billion to $1250 billion from end-2003 till today. Meanwhile her holdings of gold has increased from 600 tons to 1054 tons during the same period (here). This piece of news will augur well for gold & won't be good for USD. Let's see whether USD index can rebound from its medium-term uptrend line support at 84.5 level next week.
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