Weak Dollar Spurs Gold Bulls

This column was originally published on RealMoney on Feb. 16 at 3:31 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Gold futures this week scored a fresh 6½-month high, as the bulls are marching toward the key $700-an-ounce price level and possibly higher. Technical odds do suggest the precious yellow metal will reach that mark sooner rather than later.

April gold futures are presently in a solid six-week-old uptrend on the daily chart. The bulls have been gaining steady technical strength recently, and their cause has also received support in the form of recent weakness in the U.S. dollar vs. the other major currencies. In fact, the U.S. dollar index this week notched a fresh six-week low. The price of gold generally trades in an inverse relationship with the value of the greenback against its counterparts.

More recent encouragement for the gold market bulls is the metal's ability to separate itself from the crude oil futures market. The past several months had seen gold's fortunes closely tied to how crude oil prices were performing. However, the past few weeks have seen gold prices trek steadily north. While crude oil has rebounded from its recent lows, that market has seen more choppy and less trending action the past couple of weeks. ...