Worries over the geopolitical implications of the Russian invasion of Georgia pushed up Oil prices today as crude closed above $121. And as the traditional safe haven when the world gets nervous about possible superpower conflict, Gold rose as well and closed at $841.
Although both commodities are now much higher than I had expected in my weekly forecast, at least this late week rise was correctly forecast as gains have accelerated from more tentative moves Monday and Tuesday. It seems that the bottom was formed at the end of last week and the trend now will be up at least until September 12. If this rally does come together soon, it will confirm my previous prediction for a late summer commodities rally.
It's very possible that tomorrow will see a continued rally in commodities against the falling US dollar. I think it's possible that Oil will again see $132 in the weeks ahead, possibly $140. Gold looks like it will follow suit, although it may not rise as quickly due to some significant chart afflictions I have noted in previous posts. I think $875-900 is a realistic target.
The Euro rose to 1.4885 and is poised to go over 1.50 tomorrow and into next week. This is setting the stage for a final rally in the Euro to 1.55 after which it will fall sharply back down to earth.
Stocks were flat in New York, although they fell earlier in Asia. It seems that a retesting of previous lows is now inevitable with a probability of new lows being set in the coming weeks. I had thought there was a chance to get above 12,000 on the Dow in the near term, but that now seems like wishful thinking. Tomorrow will be interesting.
