New support at $1398. $1407 will still play a role, I assume it will be the middle of the range, and I do simply because it was the old support. I think resistence will be the old middle, which is $1428. This is a slightly tighter range than last time (EDIT: The range has loosened with support moving to $1390. Also note the recent move that has the dollar getting dumped before chasing gold. More on this later), but it will be viciously more volatile. It may also only last three days.
I assume gold is set ready to explode in price, if there is any substitution effect in terms of demand and supply of iodine and any other real goods. The role of oil will be epic, as the swing producers are currently facing tumolt. With nature happening all around, the sky is the limit for gold.
The dollar has shown strong demand, but has been met with almost equal supply. The liquadation is of epic proportions. Unless M2 and M3 are tightenened somehow, the bottom could fall out of the trade. There is plenty of supply for digtal dollars right now. The world is awash in the liquidity of fiat. It is an open ended trade. Of course, one with no support. It is like walking on a bridge that is old and without repair over a vaste gorge. Why chance it when there is eden beneath your feet?
With the dollar looking weak, equities would seem a fair choice, yet they look weak and expendable.. When the market closees the bids are there for an up move, so why are the markets not moving up? The bids are transparent and the buyer slips it out before a sell hits. The manipulation comes from the ability to control both sides of a trade a la "black boxes". They were jacked up by Bernanke's President's Working Group on Financial Markets. Now the funding is losing its luster, and there is panic selling. This will tighten M3, but probably not much. Could the Dow pull back even to gold? This is the long term scenario, and I would not be surprised to see lower equity.
The corporate monie will hide in corporate bonds, while the rest tries to fit into the precious metals market. Fiat will be burned for a source of energy, and will not match the flame of oil, and the technology and monie of gold. It will be a route.