Gold is in Danger Again this Week

Gold faces a serious threat again this week in the form of a strengthening dollar on intensifying questions about Greece and Europe. I expect the euro to come under further pressure against the dollar this week as Eurogroup parties take their debate into the midnight hour. As a result, the dollar could retest its former highs, and so I expect gold to test recent lows again. I believe the Greece issue is more likely to be resolved than not, but significant risk lies ahead that investors will not ignore. As the situation comes to a head, various related eventualities could drive heightened fear into currency trade and impact gold traded in dollar terms. However, the scarier the situation gets, the more solid a final floor for gold becomes due to its status as final safe haven against all currency concern. Thus, while traders may find opportunity to the short side near-term and while invested parties may make use of hedges against portfolio risk, long-term investors should hold on tight and wait out the storm. See my report on gold. SPDR Gold Trust (NYSE: GLD), Market Vectors Gold Miners (NYSE: GDX), iShares Silver Trust (NYSE: SLV), Direxion Daily Gold Bull 3X (NYSE: NUGT), Direxion Daily Gold Bear 3X (NYSE: DUST), Newmont Mining (NYSE: NEM).

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