Gold fell to lose its bullish momentum it had gathered for three consecutive days after Fed Chairman Mr. Bernanke's words strengthened the dollar sending all dollar-back assets plummeting to the ground. The metal retraced back to record a low at $876.40 per ounce after a high recorded earlier at $881.45 per ounce. Trading now is of low volume as we currently see somewhat sideways trading whereas yesterday the shiny metal fell 1.2 percent yesterday. Yet according to technical indicators we see that there's a chance for the metal to reverse back to the upside as it nears the oversold area. A major support is found at the area between $869 - $871 per ounce but a breakout of this support could send gold lower to as far as $853 to test the support and possible $845 per ounce in the medium term.

Similar to all other assets, we see that oil as well has fallen to the $124 per barrel level on a stronger dollar as it reached near a two week low. Gasoline demand fell 4.7 percent during the Memorial Day Holiday last week as high prices are still taking a toll on consumers as summer driving nears. The EIA report to be released later today shows that all stockpiles are to increase. Note that it has been assured that the spike in prices is due to speculative trading and that supply is enough to meet demand in the markets.

The market mover yesterday was the dollar gaining strength against all major currencies dragging down dollar backed assets after Mr. Bernanke's statements added more to speculations that the Fed's might end the series of cuts and possibly hike rates to battle inflation. Yesterday was the first time Mr. Bernanke speaks about the dollar declining and the surging inflation where he has now took the weight off of his shoulders to pass it on to Treasury Secretary Mr. Henry Paulson to strengthen the dollar after he said a day earlier that he 'favors a strong dollar.' With the dollar being of major concern at the moment, it is hard for the Feds to ease their monetary policy further and that is why, market players are betting that the next rate move will be a hike and NOT a cut