By Jack Crooks

In the last few months, the price of gold had been moving lower in a hurry…that is until earlier this week.

It seems gold’s traditional safe-haven quality came soaring in and swooped up the yellow metal. Prices went flying. On Wednesday, gold shot up US$92 overnight.

The rush of money into gold was strictly due to the lack of confidence and security in the rest of the markets. Many other asset classes are going up in smoke right now. The evidence of credit market chaos intersected in a whirlwind of surging Libor and commercial paper rates, plummeting three-month T-bill rates, widening TED and swap spreads and ongoing counterparty risk.

When all else fails, go to gold, right?

That’s what happened yesterday. And gold is extending and holding on to gains today. This week’s move changes the outlook for the metal quite a bit, as Dennis Gartman admitted in a Bloomberg article.

Will this force the buck to correct further? It could, and it probably will justify some more dollar selling. But honestly, I don’t think this dollar rally is over just yet. I see the dollar rising a bit more in the short-term… Either way, we’ll have to wait and see.