Filed under: Economic data, Commodities

Gold dropped close to $20 an ounce in yesterday’s trading as press reports increasingly circulated that the U.S. dollar/Euro exchange rate is unsustainable.

We blogged recently that Fed Chairman Bernanke has to test whether gold’s recent price appreciation has to do with concerns over global inflation or investors seeking a safe haven as the dollar continued to weaken versus Euro.

While yesterday’s appreciation versus the Euro was modest, it was a slight shift in direction and will likely get the support of both European and U.S. treasury secretaries. This is one trade I’d consider — going long dollar and short the Euro.

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This entry was posted on Wednesday, October 3rd, 2007 at 8:20 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.