There is a lot of talk recently whether the dollar has double topped or double bottomed against the Pound, Euro, and Yen. A case can be made for either. Due to the current behavior of gold (denominated in dollars obviously), I am inclined to lean in faver of a double top rather than bottom, meaning we are likely to see further dollar strength rather than weakness IMO.

I like Faber too. I missed the dollar rally and am dollar bearish but not in a risky over-leveraged way as Peter Schiff has been.

http://www.creditwritedowns.com/2009/01/wall-street-journal-right-forecast-by-schiff-wrong-plan.html

You probably saw the Schiff-Mish smackdown a few weeks back.

I see people realizing that governments are monetizing their debt. Look at the Swiss and their competitive currency devaluation. And they are clearly printing money already. All of this means that sooner or later fiat money will devalue vis-a-vis gold. It’s only a matter of time.

What I don’t see in gold in the current market is it trading like a currency alternative. I do remember the days it did so back when it topped $850 during the 1980′s recession. But back then we were less than a decade past the Nixon shock. Prior to this gold was, in theory at least, a currency itself.

Could the current gold ceiling of $1,000 USD and the fact it doesn’t seem to trade in inverse correlation to the dollar in the last few months mean that gold is no longer percieved as a currency substitute? At least not perceived asa currency by a majority of traders? If so, this would explain the apparent recent miss by Faber and Schiff on gold’s rise and their parallel miss on dollar strength (or lack of it).