Look at how gold and silver jump as the dollar is dumped. Strong dollar and weak dollar have been good for precious metals since the Fall of '08; gold traded directly inversely with the dollar until the dollar's reversal I called for on April 21st, but then precious metals traded even better on the strong dollar. We then had a weak dollar that gold traded on this fall, with a little pause in the whole game until now. So now look for some epic moves, and yes weaker dollar or strong dollar does not matter, they both return monie.
I know the Euro is weak but all FIAT is. I do not know why the DXY could not move down from here. Gold is worth many more dollars than its price and could flatten the dollar. But the old way of finance is that when risk is off, money goes into bonds and this is bullish for the dollar. I think if nothing else, the trend of whipping from back and forth between these two trends will continue into '11, but at some point the wheels will fall off. I prettiest pony in the glue factory means nothing, and besides, gold is a Thoroughbred and we should not waste its time but on the track.
As far as China hiking rates, what does that means? Why did they do it? They failed a bond auction on Wednesday and they needed the buyers to want to cone in, so they raised rates. Why are people scared of Treasuries? Because the are scarred of debt. What is the opposite of debt? Monie, get monie!