We've got to remember that gold may increase even as the dollar does, because the gold can be a hedge against euro (and other currency) weakness. So maybe this all fits. However - if it turns out that gold isn't ready to skyrocket yet, and goes under those prior swing lows, then even George Soros can sell all that GLD (even faster than selling the physical).
The wave counts for the euro still could allow it to sink - so these hedge funds might be right. But it isn't a slam dunk that gold will benefit. It very well might; just not a guarantee that money fleeing the euro must go into gold rather than the dollar.
So if gold actually travels with the euro (though I don't see the euro going to parity with the dollar - at the lowest, possibly about $112) - it could be a definite additional leg down in both. Here's the intro quote of the article - then below that, my charts of the euro including my old thought on the monthly (some outmoded but the potential targets can still be about right):
Some heavyweight hedge funds have launched large bearish bets against the euro in moves that are reminiscent of the trading action at the height of the U.S. financial crisis.
The big bets are emerging amid gatherings such as an exclusive "idea dinner" earlier this month that included hedge-fund titans SAC Capital Advisors LP and Soros Fund Management LLC. During the dinner, hosted by a boutique investment bank at a private townhouse in Manhattan, a small group of all-star hedge-fund managers argued that the euro is likely to fall to "parity"—or equal on an exchange basis—with the dollar, people close to ...
As I mentioned, I don't think the chart supports the euro going to parity - I think the area about $112 would do it. After that, the euro can be a fantastic long position. As for gold - our view for this year is to be alert for a good low to purchase either currently or within the next couple months. Maybe we've already seen it, but the Elliott Wave counts I'm comparing suggest that we cannot be certain that there won't be a lower low yet to come. So we are not in a hurry to pile on yet. (Just as we feel about the euro.)
I've looked at that euro chart a lot including today. One way to interpret is that it's completing a small wedge diagonal, which would be very bullish. Another us that it's getting ready to swoon in a wave (3) of 3 of C down - which would be very bearish. So before getting bullish on the euro I'll need to see a good reversal pattern - hasn't happened yet.
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