I suspect the economic data to be published on Tuesday, re the U.S. trade deficit, will put the kibosh on recent strength in the USD.

I believe that the USD has one more leg down. Against the Euro, I could see it dropping down to the 135-140 range.

Against the Yen, I feel something under 100 is likely once the Japanese economy starts to pick up. Confidence has waned recently (see the Tankan), but there is no reason I can see to take the USD up over 110.

Long term " and this would be following the upcoming revaluation of the Chinese yuan, which will see the cycle bottom for the USD in my view, I see the USD starting a new bull phase, and equity markets in the U.S., and internationally, gaining strength.

At that point, I would be a seller of gold (and gold stocks) and a buyer of most equities. Until then, I believe gold bullion will move into the 450-550 range, taking the Newmonts, Barricks and Goldcorps to much higher prices.

Some time farther out, it could be that inflation becomes a serious problem in the world, but I don't see signs of it today that central banks everywhere are not likely to control via further tightening to monetary policy.

Earlier today, I wrote about the Tipping Point as I see it happening to skyrocketing interest rates. That is deflationary, which would be bad for gold. But there is a caveat. If the crack in real estate becomes so bad that the credit derivatives market starts to become unhinged " which is possible but not likely " then central banks, including the Fed, will have to start printing money quickly.

That abrupt change in Fed policy would be a trigger for a bull market in gold. I just don't see it coming.

Maybe I have too much confidence in Greenspan and the Fed. Most people in the know in capital markets think highly of the Fed's track record under Greenspan. I don't see any change before his retirement at the end of the year.